Toshiba requesting 20%-30% premium from companies seeking to acquire 100% stake in memory-chip business - report (translated)
27 FEB 2017
Toshiba [TYO:6502] is seeking to obtain around JPY 2.5tn (USD 22bn) for the sale of 100% of the new company to be formed for the spin-off of its memory chip business, the Mainichi Shimbun reported.
The Japanese-language report disclosed, citing a person related to the matter, that Toshiba is requesting a 20%-30% premium from companies seeking to acquire all of the shares in the new company. Toshiba could secure a maximum of about JPY 2.4tn-2.6tn from the sale of a 100% stake, the report said, adding that, if successful, the company would be able to drastically improve its finances. On the other hand, the report went on, depending on the results of the bidding, there is a possibility that its plans could go for naught. Considering the cost of the acquisition, there are likely only a few companies that would be interested in acquiring all of the shares in the new company, the report said.
After obtaining approval for the sale of the memory unit at an extraordinary shareholders meeting to be held at the end of March, Toshiba is aiming to narrow down the number of candidates by mid-May, with the aim of completing the sale during FY17, the report said.
Toshiba is currently moving forward on the bidding process for the memory chip business, which the company has decided to sell in order to cover an impairment loss of around JPY 712.5bn incurred at its US-based nuclear power subsidiary Westinghouse Electric, the report said. As a result of the loss, Toshiba is expected to fall into negative net worth of around JPY 150bn for the fiscal year through March 2017.