Toshiba flips back to favoring Western Digital group for chip unit sale

Toshiba selects Bain group as buyer of its memory chip business

Toshiba selects Bain group as buyer of its memory chip business

Japan's Toshiba Corp has selected a group led by USA private equity firm Bain Capital to buy its prized memory chip unit, three people with knowledge of the talks said on Wednesday, the latest dramatic twist to a highly contentious auction.

Toshiba board members are to meet Wednesday, but it was unclear whether they could reach any decision, after saying last Wednesday the company was accelerating talks with the Hynix group.

SK Hynix is South Korea's second largest chipmaker, after Samsung Electronics, and also ranks second in terms of sales in the global DRAM market. Bain Capital didn't immediately respond to a request for comment.

"Toshiba is expected to make an official announcement soon but it is unlikely to be more than repeating its current stance that it is continuing talks with Bain and SK hynix", an SK hynix spokesperson said. Toshiba will negotiate exclusively with the group to quickly seal a deal.

While seeking to take over the Japanese memory unit, WD claimed that Toshiba would infringe the United States firm's rights, as a partner for a joint venture in Japan, if the memory unit is sold to other companies.

The auction of the world's No. 2 producer of NAND semiconductors has been marked by a slew of revised bids, changing alliances among suitors, as well as legal wrangling from chip joint-venture partner Western Digital Corp - a threat that still hangs over the sale.

The company needs the cash to plug a giant hole in its finances from its bankrupt US nuclear unit Westinghouse Electric Corp.

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