Toshiba Said to Narrow Group of Bidders for Chips Business

Toshiba Said to Narrow Group of Bidders for Chips Business
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Toshiba has narrowed the number of bidders for its semiconductor business from about 10 interested parties to a smaller group that includes Taiwan’s Hon Hai and Korea’s SK Hynix, according to Bloomberg citing people familiar with the matter.

The other remaining contenders include private equity firm Silver Lake Management and chipmaker Broadcom, which are collaborating on the deal, said the people, asking not to be identified because the matter is private. Offers, which are non-binding at this point, have come in at about 2 trillion yen ($18 billion), they said.

Japan’s government is likely to oppose a sale to Hon Hai or Hynix because of the strategic value of Toshiba’s technology, the people said. Toshiba will encourage Japanese companies to participate in the bidding process, though none are in the current group, the people said.

Toshiba is selling assets to contend with enormous writedowns in its Westinghouse nuclear business. The Japanese company put Westinghouse into Chapter 11 bankruptcy protection last week and said it may book a loss of as much as 1.01 trillion yen for the year that ended in March. Toshiba plans to choose a winner for the chips business by summer so it can close the deal by March of 2018, one executive said last week.