ALSO READToshiba asks Western Digital again to drop challenge to Toshiba's chip business sale At last minute, Western Digital resubmits bid for Toshiba chip unit Western Digital says Toshiba's actions in chip spat harm customers Western Digital says Toshiba breaching contract, wants exclusive chip talks Toshiba tells Western Digital not to interfere with chip unit sale
By Taro Fuse
TOKYO (Reuters) - Toshiba Corp told its creditor banks it is in talks with Western Digital Corp and Taiwan's Foxconn over the $18 billion sale of its prized chip unit in addition to its preferred bidder, banking sources familiar with the matter said on Tuesday.
The crisis-wracked conglomerate later confirmed it was in talks with other suitors as it had not been able to reach an agreement by its self-imposed deadline of June 28. It did not name the suitors.
Toshiba's preferred bidder group includes the state-backed fund Innovation Network Corp of Japan, the Development Bank of Japan, U.S. private equity firm Bain Capital and South Korean chipmaker SK Hynix Inc.
But talks have struggled to progress due to what sources say are proposals by SK Hynix that its financing be done via convertible bonds - a step that would provide it with a path towards an equity interest in the world's No.2 NAND chip maker.
Toshiba is keen for its South Korean rival to have no equity or management influence in the chip unit - a stance it has taken to satisfy a government that wants the business to remain under domestic control and for key technology to be kept out of the hands of foreign rivals.
The banking sources on Tuesday declined to be identified as they were not authorised to speak on the matter.
A representative for Western Digital, Toshiba's chip business partner but which has been at loggerheads with the Japanese firm over the sale, declined to comment.
A representative for Foxconn, the world's largest contract electronics maker formally known as Hon Hai Precision Industry, was not immediately available for comment.
(Reporting by Taro Fuse; Additional reporting by Taiga Uranaka and Makiko Yamazaki in Tokyo, and JR Wu in Taipei; Writing by Taiga Uranaka; Editing by Edwina Gibbs)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)