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The Japanese conglomerate, which needs to sell the chip business
to plug a huge hole in its finances, had been trying to seal a
deal by Wednesday with the Western Digital group but now hopes
to reach agreement with the Bain group by next week, said the
sources, who declined to be identified as the talks were
private.
A Toshiba spokesman said the firm could not comment on details
of the talks. They have already missed two deadlines by
Toshiba's banks, which want a deal to pump $18 billion or more
into the company to pull it out of negative shareholder equity
and preventing it from being delisted.
A Western Digital spokeswoman also declined to comment. The
Japanese unit of Bain Capital and SK Hynix could not be reached
for comment outside business hours.
Toshiba is desperate to sell the unit to cover billions of
dollars in liabilities from its bankrupt U.S. nuclear unit
Westinghouse. The board had been seeking to decide on the
preferred bidder for the sale, beset by legal wrangling and
revised bids, on Wednesday, people involved in the talks
previously told Reuters.
The 2 trillion yen ($18 billion) bid led by Western Digital Corp
<WDC.O> and U.S. private equity fund KKR & Co <KKR.N> had been
in the lead, sources had previously said.
But those talks snagged as Toshiba, fearing that Western Digital
was angling to eventually take over the chip business, sought to
control the U.S. firm's stake in return for a better position in
their current chipmaking joint venture, the sources said.
The Bain-led group had been chosen preferred bidder in June. But
those talks lapsed as Japan government investors who had been
part of that consortium told Toshiba they were reluctant to
close a deal in the face of the legal challenges posed by
California-based Western Digital, which jointly invests in
Toshiba's key NAND memory plant in central Japan.
(This version of the story was refiled to update headline)
(Reporting by Taro Fuse; Additional reporting by Hyunjoo Jin;
Writing by Makiko Yamazaki; Editing by William Mallard and Susan
Thomas)
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