WESTERN DIGITAL has thrown its toys out of the pram again, and looks set to delay the sale of Toshiba's semiconductor business if a consortium that includes rival NAND flash maker SK Hynix emerges as the preferred bidder.
The warning was made by Western Digital CEO Stephen Milligan in a letter to the board of Toshiba, seen by Reuters. "I must make it clear that Western Digital will not consent to a transaction with the proposed consortium," warned Milligan in the letter.
Milligan claimed that having to partner with any consortium involving Hynix would increase "the likelihood of technology leakage", although equally, the claim may well be part of Western Digital's attempt to wrest control of the NAND flash manufacturing business without having to outbid its rivals.
Last week, it was reported that Toshiba planned to sell its semiconductor business to a consortium led by the Japanese government that also includes companies from Japan, the US and South Korea.
The group comprises Japanese government-backed fund Innovation Network Corp, the Development Bank of Japan, and US private equity company Bain Capital.
South Korean chipmaker SK Hynix is also included, as is the banking division of the Mitsubishi UFJ Financial Group, as the main financial backers of the consortium's buyout proposal.
Toshiba Memory Corp is being sold by the company to plug a financial black hole caused by the Chapter 11 bankruptcy protection filing of US nuclear power station builder Westinghouse.
The sale has received a lot of attention, with US chipmaker Broadcom believed to have bid around $20bn for the unit with its partner Silver Lake, the US private equity firm, while Western Digital and Taiwanese contract manufacturer Foxconn have also reportedly bid $18bn each for the company.
Terry Gou, the founder and CEO of Foxconn, revealed last week that Apple, Dell and Kingston had joined its consortium, and suggested that Amazon, Google-owner Alphabet, Microsoft and Cisco could also be included.
Earlier in the process, Western Digital attempted to block Toshiba from selling the semiconductor business as it shares ownership of a highly regarded NAND flash semiconductor factory in Japan via three joint-venture agreements.
It claimed that Toshiba is barred by the terms of the agreement from transferring the stake held by Toshiba Memory Corp to a third party without its consent.
Reuters' sources suggested that a preferred bidder should have been chosen last Wednesday. They added that Toshiba's management favours the Broadcom-led deal, but the Japan-US-Korea consortium's automatic government stamp of approval means it is also in a strong position. µ
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