Broadcom wins Japan banks’ backing for Toshiba chip bid

Bloomberg

Broadcom Ltd. has lined up financing from three Japan banks and private-equity firm Silver Lake as it bids for Toshiba Corp.’s semiconductor business, according to people familiar with the matter.
The lending units of Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mitsubishi UFJ Financial Group Inc. plan to provide about $15 billion in loans, while Silver Lake will add $3 billion in convertible debt, said the people, asking not to be identified because the matter is private. Broadcom is offering about 2 trillion yen for chip business, though bids at this stage are non-binding and the offer could change, the people said. The second round of bids are due May 19, they said.
Toshiba is auctioning off its memory-chip business as it tries to plug a hole in its balance sheet from heavy losses in its Westinghouse nuclear business. The Tokyo-based company has also received preliminary offers from Taiwan’s Hon Hai Precision Industry Co. and South Korea’s SK Hynix Inc. Hon Hai has
indicated it may pay as much as 3 trillion yen for the chip unit, but that offer would likely face resistance from the Japanese and American governments.
Toshiba spokeswoman Kaori Hiraki declined to comment, while Broadcom didn’t respond to requests for comment. Masako Shiono, a spokeswoman at Mizuho, and Silver Lake declined to comment. Spokesmen at Mitsubishi UFJ and Sumitomo Mitsui were not immediately available to comment.
Mizuho and Sumitomo Mitsui are also primary banks for Toshiba. Toshiba’s plans to sell the chip business hit a snag this week when joint-venture partner Western Digital Corp. objected to the sale. Western Digital Chief Executive Officer Steve Milligan wrote a letter to Toshiba’s board members on April 9 advising them that they should negotiate exclusively with his company before any sale.