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Punters line up for a bit of old Tosh

by on19 May 2017

Suitors are lining up for Toshiba's semiconductor business.

Broadcom, which has teamed up with private equity firm Silver Lake, and Bain which has partnered with South Korean chipmaker SK Hynix, will participate in the second round, the people said. It was not clear if KKR and its partners would submit their offer by the end of the day.

Toshiba, which values its chip unit at l$18 billion was forced to flog it off after dramatic cost overruns at its now-bankrupt US nuclear unit. Selling the unit is critical for the company's recovery.

The sale and its outcome are still uncertain, as Toshiba's business partner, Western Digital, which jointly runs Toshiba's main semiconductor plant and is one of the suitors for the unit, is seeking to block any sale that does not have its consent. The Japanese government has asked Western Digital to sling its hook and stop moaning.

The government has made clear that it is prepared to block any sale that could see highly valued chip technology leave the country and the participation of government-backed investors is seen as a key stamp of approval.

KKR is expected one of the most favoured bidders. It is set to join hands with a state backed fund, the Innovation Network of Japan (INCJ).

Sources familiar with the matter said that INCJ and the Development Bank of Japan had separately told Toshiba of their intention to take part in the bidding process although there were no details on what form that participation may take.

Taiwan's Foxconn has formed a consortium with Japanese partner Sharp to bid in the second round. 

Toshiba is also open to entertaining new bids after the second round closes.

Last modified on 19 May 2017
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