Exclusive: Toshiba aims to name customer of $18 billion chips business on Jun 15

TOKYO/SAN FRANCISCO Toshiba Corp (6502.T) aims to name a leader for a cherished semiconductor business subsequent week, people informed with a matter pronounced on Wednesday, as a quarrel with one of a bidders over a sale seemed to escalate.

Sources told Reuters a choice has narrowed to one bid from U.S. chipmaker Broadcom Ltd (AVGO.O) and U.S. tech account Silver Lake and another from Toshiba chip partner Western Digital Corp (WDC.O) and Japanese government-related investors.

Toshiba is rushing to find a customer for a world’s second-largest writer of NAND chips, that it values during $18 billion or more, to cover billions of dollars in cost overruns during a now-bankrupt U.S. chief business Westinghouse Electric Corp.

The laptops-to-nuclear organisation will reason a house assembly on Jun 15 to confirm on a elite bidder, dual sources said, disappearing to be identified as they were not certified to pronounce to a media.

Western Digital, that jointly operates Toshiba’s categorical chip plant in Yokkaichi, western Japan, has difficult a sale bid with a authorised challenge, accusing Toshiba of a critical crack of agreement over a corner venture.

It argues that a section can't be sole though a agree and has demanded disdainful negotiating rights.

But in a minute seen by Reuters, Toshiba struck back, again seeking Western Digital to stop severe a plans.

“Toshiba encourages Western Digital to route a substantial efforts that it has put into disrupting Toshiba’s sale routine into some-more prolific channels.”

Toshiba did not immediately respond to requests for comment.

Western Digital reliable in a matter that it had perceived Toshiba’s minute though combined that any pierce by Toshiba to sell a section though a agree “clearly violate a send restrictions in a corner try agreements.”

Western Digital pronounced it was “best positioned to support Toshiba in addressing a hurdles and advancing a bequest of technological creation in Japan.”

The Broadcom-Silver Lake bid is seen as appealing given of a aloft cost of 2.2 trillion yen ($20 billion), sources have said.

Western Digital by comparison has an offer of reduction than 2 trillion yen and could also face antitrust hurdles given a organisation is a third-largest builder of NAND flash-memory chips.

“Naturally, for a Toshiba corporate side, Broadcom is a best choice,” one source said.

Toshiba shares rose as most as 6 percent on Thursday on a news that a association was shutting in on a buyer. The batch has mislaid some 36 percent given late Dec when a association flagged outrageous waste during a U.S. chief energy operations.

Other bidders embody U.S. private-equity organisation Bain Capital with South Korean chipmaker SK Hynix Inc (000660.KS), and Taiwan’s Hon Hai Precision Industry Co Ltd (2317.TW) with a Japanese section Sharp Corp (6753.T) .

(Additional stating by Taro Fuse and Sam Nussey in TOKYO; Editing by William Mallard, Alexander Smith and Edwina Gibbs)

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