Just when we thought that we had reached a conclusion in the protracted sale of Toshiba's chip unit, Western Digital on Tuesday announced its plans to seek an injunction to block the deal.
This comes following the announcement last week that a consortium led by Bain Capital had agreed to buy Toshiba's semiconducter business for anywhere between $18 billion and $22 billion, though the deal is unsigned with Apple, a member of the consortium, yet to agree terms.
Western Digital's attempts to block the deal shouldn't come as a surprise though. Western Digital says that it has legal rights to block any deal made without its consent. An independent arbitration panel is set to be formed in the coming days, and an injunction could come later this year. A final ruling isn't expected until at least 2019.
Toshiba however is in a real rush to get the deal done. The company needs to raise billions of dollars by March or else it risks being delisted. It is noted that even if the deal gets done right away, regulatory reviews often take six months which doesn't leave a whole lot of breathing space before that March window slams shut.
Western Digital's apparent stubbornness stems from its $16 billion acquisition of SanDisk last year. SanDisk had been a joint venture partner with Toshiba since 2000. In a similar act, Western Digital last week filed an arbitration request to stop Toshiba from investing in a new chip facility unle SanDisk was also allowed to invest.
The company had also previously sought an injunction from a California state court to block any sale of the chip unit without its consent. The court ordered Toshiba in July to give Western Digital two weeks’ notice before any deal is closed.