Toshiba said to attract 10 potential bidders for chips business

A logo of Toshiba Corp is seen on a printed circuit board in this photo illustration taken in Tokyo.
A logo of Toshiba Corp is seen on a printed circuit board in this photo illustration taken in Tokyo.PHOTO: REUTERS

TOKYO (BLOOMBERG) - Toshiba's memory chips business has attracted ten potential bidders, a Toshiba executive familiar with the discussions said, as the Japanese company seeks a sale of the prized unit to make up for a multi-billion-dollar write-down in its nuclear operations.

Other semiconductor makers and investments funds are among those interested, and the number may increase, the executive said. Western Digital, SK Hynix, Foxconn Technology Group, Micron Technology and Kingston Technology are among those interested, said another person with knowledge of the matter, who asked not to be identified discussing a private matter.

The bids could range from 700 billion yen (S$8.6 billion) to 1.8 trillion yen, one of the persons said. Toshiba, which is willing to sell off a majority stake in the unit, is seeking bids that value the entire business at 1.5 trillion yen. Toshiba is struggling to regain its footing after disclosing an estimated loss of 712.5 billion yen in Westinghouse Electric. The company has had to delay its earnings announcement twice, and has also floated the possibility of selling off the nuclear operations.

The shares of Toshiba rose as much as 8.4 per cent in early morning trade on Friday. The stock is down more than 30 per cent this year, after unveiling the potential losses in late December.

The semiconductor business is Toshiba's crown jewel and makes the memory chips that go into personal computers, smartphones and data centres. It accounts for about 25 per cent of Toshiba's 5.67 trillion yen in revenue during the latest fiscal year.

Financial bidders may be likely but they will probably submit bids closer to the deadline, the executive said. Among the financial bidders are Bain Capital, Silver Lake Partners and KKR, people familiar with the matter have said.

Toshiba would welcome a bid from Innovation Network Corporation of Japan, the executive said, but declined to clarify whether the government-backed group is the Japanese company that is said to have expressed interested. On March 2, Foxconn founder Terry Gou said he is "very serious" about making a bid for the memory chip business.