Apple Discussing $3 Billion Stake in Bain's Toshiba Bid

Apple Discussing $3 Billion Stake in Bain's Toshiba Bid

Taking a stake in Toshiba's memory chips business through Bain could give it a more reliable supply and enable it to become less dependent on rival Samsung, Bloomberg reports.

The iPhone maker is in talks to provide about $3 billion in capital for Bain Capital's bid for the unit, adding to financial support from Dell Inc., Seagate Technology plc and SK Hynix Inc., according to people familiar with the matter.

Toshiba Corp. said Wednesday it has entered into a memorandum of understanding with Bain Capital to accelerate talks with a group led by the United States private equity firm on the sale of its flash memory unit, with the aim of reaching a definitive agreement by the end of this month.

In June, Toshiba selected the Bain Capital-led camp as its preferential negotiating partner.

Toshiba has been in negotiations for months to sell off its chips business and pay for a disastrous move into the USA nuclear business.

Apple is interested in the chip unit because of the strategic importance of flash memory.

Note that Bloomberg's Alex Sherman, Ian King and Peter Elstrom late yesterday reported that Apple is looking to put $3 billion of its own money into Bain's bid. But Western Digital has begun legal action, opposing the sale to anyone else.

Toshiba said this week it had agreed to step up talks with the consortium, which includes South Korean chipmaker SK Hynix Inc.

Sources have said that the Bain group also included Apple and the offer was worth JPY 2.4 trillion ($22 billion), including a JPY 200 billion investment in infrastructure.

Just prior to a July court hearing, Toshiba and Western Digital worked out an agreement that was approved by a San Francisco Superior Court judge.

Apple has opposed Western Digital's bid and made a decision to back Bain because of the business's strategic importance, the people said. For the iPhone maker, Toshiba's 18% falling completely into the hands of another supplier would further narrow its options and make pricing negotiations tougher.

Western Digital sought injunctive relief through the San Francisco Superior Court while its arbitration requests remain pending with the International Court of Arbitration, a Paris-based institution operated by the International Chamber of Commerce. There is no guarantee they will be able to reach a final agreement with Toshiba. But later on it showed preference for the Bain-backed group, which is said to be discussing a $3bn stake in Toshiba's memory chip unit.

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