Exclusive: Toshiba selects Bain group as buyer of its memory chip business - sources

TOKYO (Reuters) - Japan's embattled Toshiba Corp has selected a group led by U.S. private equity firm Bain Capital to buy its prized memory chip unit, three people with knowledge of the talks said on Wednesday.

The decision was made by Toshiba's board and will be announced later on Wednesday, two sources said. The people declined to be identified as they were not authorised to speak on the matter.

Toshiba declined comment. A representative for Bain was not immediately available for comment.

The auction of the world's No. 2 producer of NAND chips has been marked by a slew of revised bids, changing alliances among suitors, as well as legal wrangling from joint venture partner Western Digital Corp - a threat that still hangs over the sale.

Three separate sources had told Reuters late Tuesday that Toshiba was shifting back toward selling the unit to a group backed by Western Digital.

But one of sources speaking on Wednesday said Toshiba and Western Digital had failed to agree on limits to the U.S. firm's future stake in the chip business that had been demanded by the Japanese company.

A representative for Western Digital was not immediately available for comment.

(Reporting by Taro Fuse and Kentaro Hamada; Writing by Makiko Yamazaki; Editing by Edwina Gibbs)