Cash-strapped Toshiba has received its first official offer, as it attempts to sell off a number of assets to recoup a multi-billion dollar loss made on its nuclear arm Westinghouse. US private equity firm Silver Lake Partners has joint forces with US chip manufacturer Broadcom to present Toshiba with a $17.9 billion offer for its profitable chip unit. About 10 bidders are said to be weighing up an offer, but as it stands a Silver Lake-Broadcom deal is the only official bid to be made.
Among the other potential suitors, Western Digital Corp are said to be in advanced talks with Toshiba. The firms already work closely together with WDC operating a chip plant with Toshiba in Japan. Micron Technology are also said to be weighing up an offer, while Toshiba may hold out for a bid from South Korean chipmaker SK Hynix.
With the Japanese government and Toshiba keen to keep its technology out of US hands, SK Hynix could steal in with a cut-price offer. Earlier this week it was reported that the South Korean firm was lining up a $9 billion for a majority stake in Toshiba Corp’s memory chip business. Sources say the Korea-Japan alliance is preferred, due to Japanese government’s concerns over tech leaks to rivals, particularly in the US. A consortium of state-funded businesses and Japanese banks had previously been mooted as a possible backer, but that now looks unlikely.
Any deal looks like it will come with many terms and conditions, with Toshiba reportedly keen to ensure that any bidder is not looking for a get-rich-quick scheme. The Japanese firm is reluctant therefore to sell to anyone looking to sell-off a number of shares after taking over.
The multinational conglomerate first called in bankruptcy lawyers earlier in the month after missing an earnings deadline for a second time. They have now confirmed loses of $9.8 billion for its nuclear unit Westinghouse. This is largely down to an ill-fated purchase of a power plant construction firm in the US that has been haemorrhaging money. Filing for bankruptcy now allows the company the opportunity to renegotiate that contract or break it off completely.