Bain, SK Hynix still hope to win Toshiba’s memory business

Bain, SK Hynix still hope to win Toshiba’s memory business. September. 14, 2017 08:15. by Sung-Gyu Kim sunggyu@donga.com.

Amid chaos over a sale of Toshiba’s memory chip business, a group including Korea’s SK Hynix seems to have gotten a chance of winning again. The group signed a memorandum of understanding with Toshiba, but it is hardly a time to take a pause with uncertainty lingering.

According to Toshiba’s press release after a board of directors’ meeting on Wednesday, Toshiba claimed it “signed a memorandum of understanding about a sale of its memory chip unit Toshiba Memory with Bain Capital.” Bain Capital has been leading the global consortium including SK Hynix and Japanese partner. “Board members made the decision, and we aim to reach a final agreement by the end of this month,” said Toshiba.

The Bain-led group’s strongest rival is another global consortium led by U.S. semiconductor company Western Digital, which was considered a winning bet in a bid race. However, the Bain-led consortium’s new offer has played a decisive role in the bid negotiation, leading to the MOU with Toshiba. It has been reported that Bain and its partners raised their offer to 18.5 billion U.S. dollars with additional 3.6 billion dollars for research and development investment. SK Hynix is said to have taken a step back after asking for some stakes.

Though Bain and SK Hynix have taken a lead in the competition, the game is not over yet. “MOU is not a legally binding document and will not promise exclusive negotiation rights," Toshiba said. "We will continue our negotiation with Taiwan's Hon Hai Precision Industry." It is still unclear who will win the bid.

In the meantime, Toshiba’s business partner Western Digital has filed a lawsuit against Toshiba, claiming, “Toshiba cannot sell its chip unit without our consent,” after Toshiba made an announcement about the company’s plan to offload Toshiba Memory.

After reporting about the MOU deal, SK Hynix’s stocks peaked at a record high of 68.59 dollars and closed at 67.08 dollars, 1.34 percent up from Tuesday’s market close.