Date
28 July 2017
Toshiba is planning to sell a 19.9 percent stake in its chip unit but is willing to offer more so long as it retains control. Photo: Reuters
Toshiba is planning to sell a 19.9 percent stake in its chip unit but is willing to offer more so long as it retains control. Photo: Reuters

Toshiba draws bids for chip business

Toshiba Corp.’s memory-chip unit has drawn bidders from South Korea, the US and Taiwan, and some involved in the process see advantages to a deal with Western Digital Corp., the Wall Street Journal reports.

In a regulatory filing released after the close of trading Tuesday, SK Hynix Inc. said it submitted a non-binding proposal for the Toshiba unit last Friday but hasn’t decided whether to submit a final bid.

Other bidders include Micron Technology Inc., Bain Capital and Western Digital from the US as well as Taiwan’s Foxconn Technology Group, people familiar with the matter said.

Toshiba said in January it wanted to sell a stake of up to 19.9 percent in the chip business to raise funds as it prepares to book a multibillion-dollar writedown in its US nuclear business on Feb. 14.

The company’s book value as of Sept. 30 was 363 billion yen (US$3.2 billion), meaning it is in danger of ending its fiscal year March 31 with negative book value unless it can record gains elsewhere.

The flash-memory business is one of the few crown jewels Toshiba has left to sell after unloading several promising units last year to raise funds, including its profitable medical-scanner business to Canon Inc. Analysts have said a roughly 20 percent stake in the chip unit could bring in US$2 billion or more.

Toshiba’s chief executive, Satoshi Tsunakawa, said last month that price wasn’t the only factor under consideration. He said it was important for the buyer to respect Toshiba’s control.

A Toshiba official said the company wants to start out by selling a 19.9 percent stake but is willing to offer more so long as it retains control.

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RC/RA

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