Toshiba Said to Put Chip Sale Process Temporarily on Hold
Toshiba temporarily canceled all meetings and decisions related to the sale of its memory chip business to address concerns raised by an industry partner Western Digital, according to Bloomberg citing people familiar with the matter.
Toshiba is trying to sell the business to raise much-needed cash, and the company has been narrowing down the field of interested buyers. That hit a snag after joint-venture partner Western Digital said a sale may violate the companies’ contract. Toshiba’s spokeswoman Kaori Hiraki denied the sale process has been put on hold.
Western Digital CEO 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. He also argued that the rumored bidders were unsuitable and the reported prices offered were above the fair and supportable value of the chip business.
WDC’s contentions raise another potential roadblock in the troubled process. The Japanese company needs to shore up finances hurt by losses from its Westinghouse nuclear business and has warned that its very survival is at risk. Analysts cautioned that WDC does have legal rights that will bear on the sale process.