As Toshiba's $18 billion chip unit sale faces tight
deadline, IPO looms
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[March 23, 2018]
By Makiko Yamazaki and Taro Fuse
TOKYO (Reuters) - Japan's Toshiba Corp
faces a Friday deadline to win Chinese antitrust approval to sell its
prized $18 billion memory-chip business by end-March, raising the
possibility the deadline may be missed and that it will seek
alternatives such as an IPO.
The conglomerate agreed last year to sell the world's second-biggest
producer of NAND flash memory chips to a consortium led by U.S. private
equity firm Bain Capital to plug a huge financial hole left by the
bankruptcy of its U.S. nuclear unit.
The company has been aiming to complete the sale by March 31, the end of
its business year. It said in September that it would need approval from
antimonopoly authorities by March 23 to meet that deadline.
Toshiba no longer faces immediate insolvency or a delisting even if it
does not meet the end-March deadline for the sale as it has raised funds
from a share issue late last year. But the deal is still key to its plan
to rebound from a $1.3 billion accounting scandal and a crisis in the
nuclear power business.
One source briefed on the matter said the chance of finalizing the sale
by end-March is slim, since China had not yet given its antitrust
Another source with direct knowledge of the matter said antitrust
approval must come by early next week, if not on Friday, if it were to
meet the deadline.
Missing the end-March deadline for the sale of the chip unit to the Bain
consortium gives Toshiba the option of walking away without penalties,
people briefed on the matter said.
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A logo of Toshiba Corp
is seen on a printed circuit board in this photo illustration taken
in Tokyo July 31, 2012. REUTERS/Yuriko Nakao/File Photo
Those people said Toshiba could listen to activist shareholders who oppose the
sale saying the $18 billion price tag undervalues the business. Hong Kong-based
Argyle Street Management, a hedge fund with $1.2 billion under management, has
said the board should consider an IPO instead.
A Toshiba spokesman said the company continues its effort to close the deal by
the end of this month. Bain declined to comment.
China's commerce ministry did not immediately respond to a faxed request for
The sources asked not to be named because the information is private.
The flash memory chip business has been the source of most of Toshiba's earnings
as the company struggles to grow other core businesses such as social
Toshiba shares closed 2.5 percent lower on Friday. They rose earlier this year
but have given up the gains to be flat so far in 2018.
(Reporting by Makiko Yamazaki and Taro Fuse; Additional reporting by Junko
Fujita and Yoshiyasu Shida in TOKYO, Yawen Chen in BEIJING; Editing by
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