Toshiba takes another blow as US court rules in Western Digital's favour - PC Retail

Toshiba takes another blow as US court rules in Western Digital's favour

Western Digital believes its position has been strengthened and is hopeful of tying up a deal for Toshiba's memory unit
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Toshiba attempts to sell-off its valuable memory business have hit yet another roadblock. After months of legal wrangling with its partner Western Digital, a California Court has now ordered Toshiba to give Western Digital access to joint-venture assets that it was previously withholding.

The Superior Court of California granted motion for preliminary injunctive relief made by Western Digital subsidiary SanDisk, allowing it access to certain information stored on databases owned by Toshiba. It will be celebrated as a victory for Western Digital who itself is attempting to buy up the memory business either alone or as part of a group bid.

Toshiba however has been close to tying up a more lucrative deal with third party bidders, with a figure of around $18 billion reportedly the asking price. A deal was all but ready to go ahead with a consortium headed up by Bain Capital but that appears to have hit the buffers due to the legal on goings with Western Digital. Toshiba has instead opened up dialogue with a number of other prospective buyers, with Foxconn now believed to be leading the way.

Despite the latest judge’s ruling, Toshiba is still confident of completing a deal that cuts Western Digital out. “While we are aware of the judge’s ruling today, we do not expect any of the current ongoing litigation with Western Digital and SanDisk to limit us in proceeding with our business plans.”

However, following the ruling Western Digital believes its position has been strengthened and is still hopeful of tying up a deal of its own. “We remain in constructive dialogue with Toshiba and its stakeholders, and continue to seek a solution that is in the best interest of all parties,” a spokesman said.

All of this comes in an effort to make up the debt Toshiba has accrued. The nature of the sale has seen the Japanese government heavily involved, with emphasis being placed on keeping the firm within the country. 

Toshiba’s financial woes are largely connected to its failed nuclear unit Westinghouse. Acquired in 2006, an ill-advised purchase in 2015 has led to massive scandal and loses for its parent company. Last month Westinghouse filed for a Chapter 11 bankruptcy and Toshiba is attempting to split from the company. Since revealing its financial turmoil a number of investors have shown an interest in Toshiba’s technology businesses.

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