Apple and Dell bid to acquire Toshiba's memory chip business

  • Apple and Dell bid to acquire Toshiba's memory chip business

Apple and Dell bid to acquire Toshiba's memory chip business

Without an agreement soon, it will be hard for Toshiba to gain by the end of the financial year in March, regulatory approval and hence the funds it needs to cover billions in liabilities at it USA nuclear unit. (With Toshiba being the world's second largest flash memory supplier, whoever ends up acquiring the company is going to have a lot of influence on the market and flash technology R&D.) It certainly seems Toshiba's battle to right itself is going to continue into next year and Western Digital is not going to make it easy. 'The sale of TMC must promote further growth of TMC's memory business, and return Toshiba group to positive equity.

Jumping to the present, Toshiba has made a decision to proceed with the negotiations with an investment group led by Bain Capital despite disappointment (and more legal objections) from Western Digital who tried to block similar negotiations back in June. But it added that the memorandum was not legally binding and did not prevent it from negotiating with other parties. Seagate declined to comment on the Toshiba memory business.

"Toshiba regrets that Western Digital persistently overstates its limited consent rights in public statements", the Japanese company said in a statement, referring to the USA firm's claim that its consent was required for a sale as it had invested in Toshiba's semiconductor plant.

As my colleague Adam Routh reported on Barron's Asia Stocks to Watch, after Western yesterday said it was "surprised" at Toshiba's move, Toshiba issued a statement saying that it "regrets that Western Digital persistently overstates its limited consent rights in public statements".

San Jose, California-based Western Digital has pursued legal action through the California court system, claiming the sale of the Toshiba memory business can not take place without SanDisk's consent. The deal could be worth $19 billion, but talk of numbers is still premature: An actual transaction is hardly closer than it was three months ago, when Toshiba.

The group had been chosen preferred bidder in June.

Western Digital sought injunctive relief through the San Francisco Superior Court while its arbitration requests remain pending with the International Court of Arbitration, a Paris-based institution operated by the International Chamber of Commerce. The South Korean chipmaker plans to limit its role to financing, but it's unclear if it hopes to gain a stake in the future.

Shares of Toshiba ended flat, while SK Hynix shares rose 1.3 percent.