Broadcom and KKR Said to Be Leading Bidders for Toshiba Unit

Broadcom and KKR Said to Be Leading Bidders for Toshiba Unit
Fotolia

Broadcom and a group led by KKR are emerging as the two leading bidders for Toshiba’s semiconductor unit as of today's deadline for second-round offers, according to Bloomberg, citing people familiar with the matter.

American Broadcom is offering about 2.2 trillion yen ($20 billion) and would face simpler regulatory reviews than some rivals, said one of the people, asking not to be identified. The competing group, which includes state-backed Innovation Network of Japan and Development Bank of Japan, plans to offer about 1.8 trillion yen and would benefit from support from the country’s government.

Western Digital has been in talks to join the Japan group, but the parties haven’t been able to agree on how to divvy up ownership. The company has been offered a stake of less than 20 percent, but it wants a controlling share, they said. Apple, which uses Toshiba memory chips in its products, is still considering whether to contribute capital to one or more bidders, they said.

Time is critical because Toshiba's shares may be delisted if it the deal isn’t closed by next March, the end of its fiscal year. While Taiwan’s Hon Hai Precision and South Korea’s SK Hynix have also expressed interest with preliminary bids of as much as $27 billion, Japan’s government is reluctant to let the business fall into their hands. The deal talks are still fluid however and the leading bidders may change.