Ten bidders sniffing around Toshiba's memory biz – reports

Tenuous but critical deal to save corporation takes its first steps


Accordng to the Nikkei Asian Review, there are ten bidders for Toshiba's memory business.

The division is being partly or wholly sold so that Toshiba can recapitalise after the horrendous and ongoing financial haemorrhage from its US nuclear plant business, Westinghouse Electric. It has filed Chapter 11 bankruptcy papers, having given up on trying to resolve the losses in the normal course of business.

To prepare the memory division for sale, it is being set up as a spun-off business on 1 April, valued at $13.5bn to $18bn (¥2 trillion) – but Toshiba wants more. President Satoshi Tsunakawa said: "We are assuming [a price of] at least ¥2 trillion."

He thinks Toshiba – which is effectively in a negative net-worth situation, facing a loss of ¥1 trillion ($7.75bn) – could return to positive territory by 2018 through selling stakes in the memory business. If it does not exit negative net worth within 12 months, the Tokyo Stock Exchange could delist it.

Shareholders have approved the memory business spin-off plan. The ten interested bidders in this initial round include:

  • Western Digital
  • SK Hynix
  • Foxconn (Hon Hai)
  • Unnamed European and US investment funds

Previously Bain has been mentioned as a potential bidder, as has Micron.

The Nikkei report confirms interest from the state-owned Development Bank of Japan and the Innovation Network Corporation of Japan, a public-private fund, in buying into the memory business to prevent it falling into Chinese and/or Taiwanese control.

Toshiba is said to be pursuing deal closure in a year's time, the end of March 2018, and may attempt to construct a deal by combining various bids. ®


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