While Toshiba has narrowed down the pool of suitors, all the bids have Apple, its key customer, as a common denominator.
On Friday, Japan’s Kyodo news agency reported that a group, which includes Western Digital, has sought $464 million (50 billion yen) from Apple Inc to help finance a bid for Toshiba Corp’s NAND chip business.
According to sources familiar with the talks, Western Digital is leading a $17-18 billion bid for Toshiba’s chip business.
It is unclear whether other parties from the consortium, which includes U.S. private equity firm KKR & Co LP, as well as Japanese government-backed investors, will be willing to pay more for the additional 15 billion yen that Western Digital had previously planned to pay as part of the bid.
Western Digital wants a future stake in Toshiba’s chip business, but the quantum is as yet unknown, said sources.
Toshiba however is worried that the company was angling to eventually take over the chip business, and has demanded that Western Digital limit the size of its stake in the company.
Sources have preferred the cover of anonymity since the talks are confidential.
Toshiba’s board expects to reach a final agreement with the consortium by September 13, said sources.
Toshiba is under pressure to clinch a deal and complete regulatory approvals by the end of this fiscal year in March to ensure that it does not report negative net worth, for a second year in a row, which could result in it being delisted from the Tokyo Stock Exchange.
Last week, the company reported that it had narrowed down suitors and was looking at a bid from U.S. private equity firm Bain as well as one from Foxconn.
Significantly, all three bids involved Apple, Toshiba’s key memory chip customer, said sources.