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Japan govt-led bid for Toshiba chip unit to include SK Hynix - sources

Reuters  |  TOKYO/SEOUL 

By Taiga Uranaka and Se Young Lee

TOKYO/SEOUL (Reuters) - A Japanese government-led consortium bidding for Corp's chip business will include South Korean chipmaker SK Hynix Inc, sources familiar with the matter said - a move likely to add firepower to the group's bid in the hotly contested auction.

The sale has seen much tense last-minute jockeying by suitors, leaving the conglomerate little time to come to a decision by its shareholders meeting at the end of this month.

is seeking a minimum of $18 billion for the world's second-biggest producer of NAND chips and wants to get the deal done as quickly as possible to help it cover billions of dollars in cost overruns at now-bankrupt nuclear unit Westinghouse.

A state-backed fund, the Innovation Network Corp of (INCJ), has been at the centre of trade ministry efforts to forge a successful bid that will keep the highly prized unit under domestic control. But the nature of its partnerships appears to be going through drastic changes compared to just last week.

INCJ was part of a proposed bid tabled by U.S. chipmaker Western Digital last week that also included U.S. private equity firm KKR & Co LP, sources familiar with the matter have said.

But separate sources have also said INCJ is in talks with Bain Capital about bidding for the unit, as the U.S. private equity firm appears willing to put in more money than rivals.

The Asahi newspaper reported on Wednesday that INCJ was now in a consortium that included Bain, KKR, SK Hynix as well as the Development Bank of (DBJ).

Western Digital, which jointly operates Toshiba's main chip plant but is now in a bitter dispute with the conglomerate over whether the auction can proceed without its consent, was not included.

The INCJ bid would also exceed 2 trillion yen ($18 billion), the newspaper said.

A person familiar with the matter told on Wednesday that SK Hynix would be providing a loan to help finance the bid although it would not be taking a direct stake. Another person briefed on the matter said the Asahi report was correct on the participants in the consortium.

The sources declined to be identified as they were not authorised to talk to the media on the matter.

The flurry of jockeying has made it likely that will not be able to select a preferred bidder by Thursday as it had hoped, another person familiar with the matter told

Mana Nakazora, chief credit analyst at BNP Paribas, said the complexity of the situation now meant that the auction could only be settled with the government's intervention.

"While the makeup of the Japan-U.S. consortium may well change, it's increasingly unlikely that there are other options," she said.

FIERCE BATTLE

Other suitors are also making last-minute pitches.

One source familiar with the matter said on Wednesday that Western Digital is still in talks with the trade ministry over their consortium. The California-based firm has decided to raise its offer to at least 2 trillion yen, a separate source said on the weekend.

The CEO of Foxconn told on Monday the Taiwanese firm was leading a group including Apple Inc, computing giant Dell Inc and Kingston Technology Co.

The highest known bid so far is one from U.S. chipmaker Broadcom and its partner, U.S. private equity firm Silver Lake. They have offered 2.2 trillion yen, sources have said.

According to the Asahi report, INCJ, DBJ and Bain would each invest 300 billion yen in a special-purpose company to buy the unit, Memory Corp.

itself would contribute up to 100 billion yen and other Japanese firms a combined 140 billion yen, while KKR is considering putting in 100 billion yen, the Asahi said. It added that SK Hynix would lend 300 billion yen to the project and Bank of Tokyo Mitsubishi UFJ 400 billion yen.

Toshiba, SK Hynix, INCJ, Bain, KKR and a spokesman for the core unit of Mitsubishi UFJ Financial Group Inc declined to comment. The trade ministry and DBJ did not immediately respond to requests for comment.

Shares in ended down 4 percent on Wednesday, hurt by a newspaper report that the conglomerate would not be able to file its annual report by the end of this month.

($1 = 110.0600 yen)

(Reporting by Taiga Uranaka in Tokyo and Se Young Lee in Seoul; Additional reporting by Taro Fuse, Junko Fujita, Makiko Yamazaki, Sam Nussey, Yoshiyasu Shida and William Mallard; Editing by Edwina Gibbs)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Japan govt-led bid for Toshiba chip unit to include SK Hynix - sources

TOKYO/SEOUL (Reuters) - A Japanese government-led consortium bidding for Toshiba Corp's chip business will include South Korean chipmaker SK Hynix Inc, sources familiar with the matter said - a move likely to add firepower to the group's bid in the hotly contested auction.

By Taiga Uranaka and Se Young Lee

TOKYO/SEOUL (Reuters) - A Japanese government-led consortium bidding for Corp's chip business will include South Korean chipmaker SK Hynix Inc, sources familiar with the matter said - a move likely to add firepower to the group's bid in the hotly contested auction.

The sale has seen much tense last-minute jockeying by suitors, leaving the conglomerate little time to come to a decision by its shareholders meeting at the end of this month.

is seeking a minimum of $18 billion for the world's second-biggest producer of NAND chips and wants to get the deal done as quickly as possible to help it cover billions of dollars in cost overruns at now-bankrupt nuclear unit Westinghouse.

A state-backed fund, the Innovation Network Corp of (INCJ), has been at the centre of trade ministry efforts to forge a successful bid that will keep the highly prized unit under domestic control. But the nature of its partnerships appears to be going through drastic changes compared to just last week.

INCJ was part of a proposed bid tabled by U.S. chipmaker Western Digital last week that also included U.S. private equity firm KKR & Co LP, sources familiar with the matter have said.

But separate sources have also said INCJ is in talks with Bain Capital about bidding for the unit, as the U.S. private equity firm appears willing to put in more money than rivals.

The Asahi newspaper reported on Wednesday that INCJ was now in a consortium that included Bain, KKR, SK Hynix as well as the Development Bank of (DBJ).

Western Digital, which jointly operates Toshiba's main chip plant but is now in a bitter dispute with the conglomerate over whether the auction can proceed without its consent, was not included.

The INCJ bid would also exceed 2 trillion yen ($18 billion), the newspaper said.

A person familiar with the matter told on Wednesday that SK Hynix would be providing a loan to help finance the bid although it would not be taking a direct stake. Another person briefed on the matter said the Asahi report was correct on the participants in the consortium.

The sources declined to be identified as they were not authorised to talk to the media on the matter.

The flurry of jockeying has made it likely that will not be able to select a preferred bidder by Thursday as it had hoped, another person familiar with the matter told

Mana Nakazora, chief credit analyst at BNP Paribas, said the complexity of the situation now meant that the auction could only be settled with the government's intervention.

"While the makeup of the Japan-U.S. consortium may well change, it's increasingly unlikely that there are other options," she said.

FIERCE BATTLE

Other suitors are also making last-minute pitches.

One source familiar with the matter said on Wednesday that Western Digital is still in talks with the trade ministry over their consortium. The California-based firm has decided to raise its offer to at least 2 trillion yen, a separate source said on the weekend.

The CEO of Foxconn told on Monday the Taiwanese firm was leading a group including Apple Inc, computing giant Dell Inc and Kingston Technology Co.

The highest known bid so far is one from U.S. chipmaker Broadcom and its partner, U.S. private equity firm Silver Lake. They have offered 2.2 trillion yen, sources have said.

According to the Asahi report, INCJ, DBJ and Bain would each invest 300 billion yen in a special-purpose company to buy the unit, Memory Corp.

itself would contribute up to 100 billion yen and other Japanese firms a combined 140 billion yen, while KKR is considering putting in 100 billion yen, the Asahi said. It added that SK Hynix would lend 300 billion yen to the project and Bank of Tokyo Mitsubishi UFJ 400 billion yen.

Toshiba, SK Hynix, INCJ, Bain, KKR and a spokesman for the core unit of Mitsubishi UFJ Financial Group Inc declined to comment. The trade ministry and DBJ did not immediately respond to requests for comment.

Shares in ended down 4 percent on Wednesday, hurt by a newspaper report that the conglomerate would not be able to file its annual report by the end of this month.

($1 = 110.0600 yen)

(Reporting by Taiga Uranaka in Tokyo and Se Young Lee in Seoul; Additional reporting by Taro Fuse, Junko Fujita, Makiko Yamazaki, Sam Nussey, Yoshiyasu Shida and William Mallard; Editing by Edwina Gibbs)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Business Standard
177 22

Japan govt-led bid for Toshiba chip unit to include SK Hynix - sources

By Taiga Uranaka and Se Young Lee

TOKYO/SEOUL (Reuters) - A Japanese government-led consortium bidding for Corp's chip business will include South Korean chipmaker SK Hynix Inc, sources familiar with the matter said - a move likely to add firepower to the group's bid in the hotly contested auction.

The sale has seen much tense last-minute jockeying by suitors, leaving the conglomerate little time to come to a decision by its shareholders meeting at the end of this month.

is seeking a minimum of $18 billion for the world's second-biggest producer of NAND chips and wants to get the deal done as quickly as possible to help it cover billions of dollars in cost overruns at now-bankrupt nuclear unit Westinghouse.

A state-backed fund, the Innovation Network Corp of (INCJ), has been at the centre of trade ministry efforts to forge a successful bid that will keep the highly prized unit under domestic control. But the nature of its partnerships appears to be going through drastic changes compared to just last week.

INCJ was part of a proposed bid tabled by U.S. chipmaker Western Digital last week that also included U.S. private equity firm KKR & Co LP, sources familiar with the matter have said.

But separate sources have also said INCJ is in talks with Bain Capital about bidding for the unit, as the U.S. private equity firm appears willing to put in more money than rivals.

The Asahi newspaper reported on Wednesday that INCJ was now in a consortium that included Bain, KKR, SK Hynix as well as the Development Bank of (DBJ).

Western Digital, which jointly operates Toshiba's main chip plant but is now in a bitter dispute with the conglomerate over whether the auction can proceed without its consent, was not included.

The INCJ bid would also exceed 2 trillion yen ($18 billion), the newspaper said.

A person familiar with the matter told on Wednesday that SK Hynix would be providing a loan to help finance the bid although it would not be taking a direct stake. Another person briefed on the matter said the Asahi report was correct on the participants in the consortium.

The sources declined to be identified as they were not authorised to talk to the media on the matter.

The flurry of jockeying has made it likely that will not be able to select a preferred bidder by Thursday as it had hoped, another person familiar with the matter told

Mana Nakazora, chief credit analyst at BNP Paribas, said the complexity of the situation now meant that the auction could only be settled with the government's intervention.

"While the makeup of the Japan-U.S. consortium may well change, it's increasingly unlikely that there are other options," she said.

FIERCE BATTLE

Other suitors are also making last-minute pitches.

One source familiar with the matter said on Wednesday that Western Digital is still in talks with the trade ministry over their consortium. The California-based firm has decided to raise its offer to at least 2 trillion yen, a separate source said on the weekend.

The CEO of Foxconn told on Monday the Taiwanese firm was leading a group including Apple Inc, computing giant Dell Inc and Kingston Technology Co.

The highest known bid so far is one from U.S. chipmaker Broadcom and its partner, U.S. private equity firm Silver Lake. They have offered 2.2 trillion yen, sources have said.

According to the Asahi report, INCJ, DBJ and Bain would each invest 300 billion yen in a special-purpose company to buy the unit, Memory Corp.

itself would contribute up to 100 billion yen and other Japanese firms a combined 140 billion yen, while KKR is considering putting in 100 billion yen, the Asahi said. It added that SK Hynix would lend 300 billion yen to the project and Bank of Tokyo Mitsubishi UFJ 400 billion yen.

Toshiba, SK Hynix, INCJ, Bain, KKR and a spokesman for the core unit of Mitsubishi UFJ Financial Group Inc declined to comment. The trade ministry and DBJ did not immediately respond to requests for comment.

Shares in ended down 4 percent on Wednesday, hurt by a newspaper report that the conglomerate would not be able to file its annual report by the end of this month.

($1 = 110.0600 yen)

(Reporting by Taiga Uranaka in Tokyo and Se Young Lee in Seoul; Additional reporting by Taro Fuse, Junko Fujita, Makiko Yamazaki, Sam Nussey, Yoshiyasu Shida and William Mallard; Editing by Edwina Gibbs)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22