SK HYNIX will invest ¥395bn ($3.5bn) in Toshiba Memory Corporation to help finance the Bain Capital-led consortium buying out the Japanese semiconductor company.
Part of the financing will be in the form of convertible bonds that could enable it to take a stake of up to 15 per cent in the company at some point in the future. However, newswires are now suggesting that the final price the consortium will pay is around ¥2tn ($18bn), not the $22bn that Bain had reportedly upped its bid to.
SK Hynix will be joined by Apple after talks over the future supply of NAND flash memory chips were settled.
However, according to Reuters, the deal still has yet to be signed, although a spokesperson said that Toshiba intended to get it wrapped up "as soon as possible".
According to a statement issued today by SK Hynix, the Bain-led consortium will hold 49.9 per cent of the voting rights in Toshiba Memory Corporation, while Toshiba will retain a 40.2 per cent holding.
Meanwhile, Japan's Hoya Corp, a medical technology firm that also makes parts for chip devices, has been roped in to ensure that the unit remains in majority Japanese ownership. It will take a 9.9 per cent stake.
Bain's consortium, meanwhile, also includes Apple, Dell, Western Digital's rival Seagate and Kinston Technology. These companies will invest in the form of non-convertible preferred shares, according to Reuters.
Reports that Apple has agreed to join the Bain-led bid come after Bloomberg had earlier this week suggested that rival private-equity bidder KKR had tried to persuade the company to join its consortium with disk drive giant Western Digital.
Apple's backing is valuable as it is one of the world's biggest single buyers of NAND flash storage. However, it preferred the Bain-led bid for the Toshiba unit on competition grounds, fearing that if Toshiba Memory Corporation were to go wholly or partly to WD it would be able to dominate the market.
Toshiba, meanwhile, needs to get a deal moving and soon in order to rectify its financial situation following the embarrassing collapse of its Westinghouse nuclear subsidiary in the US. It is threatened with delisting from the Tokyo Stock Exchange at the end of the financial year in March unless it raises new funding.
However, the sale of Toshiba Memory Corporation could still stall if Western Digital carries out its threat of legal action.
It claims that its manufacturing joint venture agreement with Toshiba Memory Corporation - acquired via its $16bn acquisition last year of SanDisk - gives it a right of veto over any sale of the company, a claim that Toshiba rejects. µ
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