A bid for Toshiba Memory, a semiconductor arm of Toshiba, took an unexpected turn. It was reported that Toshiba will resume negotiations with Taiwan's Foxconn and the US’s Western Digital (WD) in connection with the sell-off of Toshiba Memory.
According to the Nihon Keizai Shimbun in Japan, Hirada Masayoshi, chief financial officer of Hirada Toshiba disclosed this fact at a briefing session for creditor banks on July 11.
Even though Toshiba chose a Korea-US-Japanese alliance which includes SK, as the preferred bidder at the end of last month, CEO Hirada said on the day, "It takes longer than originally expected to make a decision."
According to the Nihon Keizai Newspaper among others, the Korea-US-Japanese alliance was said to be adjusting the form of SK Hynix’s investment. SK Hynix proposed that the company provide funds through a convertible bond method which may allow SK Hynix to eventually secure a stake in Toshiba Memory.
It was reported that Toshiba did not want Korean company SK Hynix to acquire a stake in Toshiba memory or influence management. The Japanese government is also keeping an eye on Toshiba to prevent its semiconductor technology from being leaked to overseas competitors for security reasons. In the global NAND flash memory market, Toshiba memory ranks second in market share, while SK Hynix fifth in market shares.
In addition to SK, Development Bank of Japan and US private equity fund Bain Capital participated in the Korea-US-Japanese alliance, which was led by the Innovation Network Corporation of Japan, a public-private fund of Japan.
CFO Hirada also mentioned WD's lawsuit against the sale. "Even if an injunction is issued, the sell-off of Toshiba Memory will proceed," CFO Hirada said. The first court hearing will be held in the Californian Superior Court on September 14.
"I personally have a more than 50% confidence," said Terry Gou, chairman of Foxconn in a press conference, showing his will not to stop taking part in the bid shortly after Toshiba's board of directors elected the Korea-US-Japan alliance as a preferred bidder at the end of last month "At that time, it was reported that I would lose the bid. But I successfully took over Sharp later," Gou said, referring to the process to take over Sharp.
Toshiba has to close the deal as soon as possible to complete the sale of Toshiba Memory by March of next year.