Toshiba Is Said to Aim for Chip Deal With Bain by Sept. 20

Toshiba Is Said to Aim for Chip Deal With Bain by Sept. 20
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Toshiba is aiming to finalize a deal to sell its memory chips business to a group led by Bain Capital at a Sept. 20 board meeting, despite opposition from partner Western Digital, according to Bloomberg, citing people familiar with the matter.

Toshiba’s effort faces resistance because the Bain group now includes several Western Digital competitors, including Seagate, Kingston and Hynix, said the people, asking not to be identified. Western Digital partnered with KKR & Co. to try to buy the chips business, but Toshiba opted for the Bain bid last week, signing a memorandum of understanding as they work toward a final agreement.

Toshiba’s board might not be able to reach a final deal this week and if not would revisit the issue the following week, said one of the people. Kaori Hiraki, a spokeswoman for Toshiba, said Sunday she couldn’t comment on the details of the deal. Apple Inc. helped swing momentum away from Western Digital by backing Bain’s effort. The iPhone maker is in talks to provide about $3 billion in capital for the bid.

Hynix will initially contribute only debt to the Bain group to minimize anti-trust scrutiny, said one of the people familiar with the matter. The South Korean company will have an option to acquire about 15 percent of the unit later. John Connaughton, Bain’s co-managing partner, confirmed the firm is working with Apple and Dell, without disclosing details of the negotiations.

Bain issued a statement identifying Seagate and Kingston as partners as well. The U.S. firm said it would honor Western Digital’s contractual terms but that the company is “over-reaching“ in asserting its rights.