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Bloomberg
KKR & Co. is in talks with Toshiba Corp. about a preemptive bid for the Japanese company’s memory chips business that would accelerate completion of a sale and end negotiations with other potential acquirers, according to people familiar with the matter.
Toshiba is in favor of the proposal from KKR and Innovation Network Corp. of Japan because it would simplify regulatory approval and speed up the delivery of much-needed cash, said the people, asking not to be identified because the matter is private. KKR and its partners, which also include Development Bank of Japan Inc., have indicated they would pay 1.8 trillion yen ($16 billion) to 2.1 trillion yen, one of the people said. Western Digital Corp.’s chief executive officer plans a trip to Japan this week to discuss joining the group, another person said.
Toshiba hasn’t definitively decided whether to accept the KKR offer and may still proceed with the auction, the people said. Kaori Hiraki, a spokeswoman at Toshiba; Toshimitsu Irie, a spokesman at INCJ; and a spokeswoman for KKR declined to comment. Rival bidders for the business include Taiwan’s Hon Hai Precision Industry Co., South Korea’s SK Hynix Inc. and Broadcom Ltd.
The company is selling off assets to plug a hole in its balance sheet after enormous losses in its Westinghouse nuclear subsidiary. The semiconductor business, which makes memory chips for mobile phones and other devices, is most valuable asset. Toshiba is aiming to complete sale by March 2018.
The company’s stock has lost half its value since December when it warned of multibillion-dollar losses in the nuclear unit. It also faces potential delisting of its shares from the Tokyo Stock Exchange. The stock fell 0.9 percent on Monday in Tokyo trading.
Toshiba has drawn strong interest for the semiconductor unit, but the leading bidders may struggle to close a deal quickly. Hon Hai, for example, has indicated it would be willing
to pay as much as 3 trillion yen, but the Japanese and US governments would likely oppose such a sale because of the potential for the Taiwanese company to shift Toshiba’s technology into China.