Suitors scramble for piece of Toshiba memory chip pie

Toshiba

After our recent article that Canon had passed on investing in Toshiba’s troubled memory chip business, news has come via the Financial Times that a few other well-known investors are putting up their hands for a slice of the pie.

The company is said to have had bids from Taiwan’s Foxconn, who manufacture Apple’s iPhone and iPad, a private equity form, Silver Lake, and chip maker SK Hynix from South Korea.

As mentioned in our original story, this is due to the company having to write down up to as much as US$7 billion due to an accounting scandal that occurred in 2015.

There are a couple of stumbling blocks in the way, not the least being Toshiba still expects to keep management control over the company. This could put make some suitors shy away from buying into the venture, including investments funds, who are currently the Japanese conglomerates preferred partner. Toshiba believes such a fund would be keen to seal the deal before the end of financial year on March 31.  If the deadline is met, this means the company will have enough funds to cover the write down that would otherwise wipe out shareholders’ US$3 billion equity, which in turn would downgrade the company from the first section of the Tokyo Stock Exchange.