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Apple discussing $3-bn stake in Bain's Toshiba bid

The iPhone maker is in talks to provide about $3 billion in capital for Bain Capital's bid for the unit

Alex Sherman Ian King & Peter Elstrom 

Apple, WWDC 2017
Photo: Reuters

is playing the role of kingmaker in the contentious battle for Corp’s memory chips business.
The is in talks to provide about $3 billion in capital for Bain Capital’s bid for the unit, adding to financial support from Dell, and SK Hynix, according to people familiar with the matter. That support convinced to sign a memorandum of understanding with Bain and work toward a final agreement this month, said the people, asking not to be identified because the matter isn’t public. plans to take an equity stake alongside Bain, they said. If the agreement is completed, it may exceed Apple’s largest deal ever, the $3-billion acquisition of Beats Electronics LLC.

The Cupertino, California-based company is helping swing the deal away from Western Digital Corp, one of Apple’s own suppliers that tried to buy the chips unit with KKR & Co. Apple’s money will help fill a gap left, when state-backed Innovation Network Corp of Japan and Development Bank of Japan decided to pull back from the Bain bid in the face of litigation from Western Digital. spokesman Josh Rosenstock declined to comment.
has been in negotiations for months to sell off its chips business and pay for a disastrous move into the US nuclear business. The company needs to raise the money by March to avoid seeing its shares delisted from the Tokyo Stock Exchange. The auction has been complicated by legal action from Western Digital, which has argued it should have veto rights in any sale because of its partnership with in the chips business. The Japanese company disputes that and sued Western Digital for more than $1 billion for interfering in the auction.
has opposed Western Digital’s bid and decided to back Bain because of the business’s strategic importance, the people said. depends on flash memory from in its iPhones and iPods, and wants a continued supply so it’s not dependent on rival Samsung Electronics Co. The iPhone maker’s largest deal to date was the Beats acquisition in 2014.
said Thursday it “regrets” that Western Digital is persistently overstating its rights and that the Japanese company is committed to completing the chip sale by March.
Meanwhile, the legal dispute is progressing toward a resolution, with a three-member arbitration panel likely to be assembled by the end of the month, according to people familiar with the matter. Arbitration is expected to take no more than six or seven months, which means a decision is likely before March, they said.
selected a Bain-backed group as its preferred bidder in the chip sale in June, as the Tokyo-based company sought to close the deal that month.

First Published: Fri, September 15 2017. 01:55 IST