Bain Capital led consortium in the lead for Toshiba’s chip business: sources

Fears that Western Digital might take over control of Toshiba’s chip business led to it being dropped as the preferred bidder, said sources.

According to two sources briefed on the matter at hand, Toshiba Corp favors a consortium led by Bain Capital LP and SK Hynix Inc to buy its NAND chip business. The development comes after Toshiba failed to bridge the gap with its business partner and rival bidder, Western Digital Corp.

Toshiba needs to divest its chip making business in order to plug a hole in its finances. While it has been trying to get a deal going with Western Digital, its come to naught. It now hopes to reach an agreement with the group led by Bain next week, said sources who preferred the cover of anonymity since the talks were private.

Toshiba’s spokesman did not comment on the details of the talks.

A spokeswoman from Western Digital also declined to comment.

The Japanese unit of Bain Capital and SK Hynix could not be reached for comment outside business hours.

Toshiba needs to sells its chip business to cover its liabilities from its bankrupt U.S. nuclear division Westinghouse.

The process of selling its chip business has been beset by wrangling and revised bids, said sources.

Earlier, Western Digital Corp led U.S. private equity fund KKR & Co had been in the lead, said sources. Talks however snagged after Toshiba voiced its fears of Western Digital angling to eventually take over its chip business, said sources.

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