The consortium led by Western Digital will offer 1.9 trillion yen - about $17.4bn - to take over Toshiba Memory Corp, after pushing aside the preferred bidder, a group led by Bain Capital.
That's according to Reuters, citing 'sources familiar with the deal'.
Also according to Reuters, WD is throwing in 150 billion yen via convertible bonds, but isn't seeking voting rights in the business, with whom the company shares a 50 per cent stake in NAND flash manufacturing facilities in Japan.
Private equity firm KKR and two government linked organisations in Japan, which had been part of the Bain-led consortium, are also involved in the WD-led bid, along with a number of other Japanese companies.
KKR, Innovation Network of Japan and the Development Bank of Japan will each throw 300 billion yen into the bid, alongside investments of about 50 billion yen from other Japanese companies.
This will ensure that Japanese organisations maintain control of Toshiba Memory Corp with a stake of about 60 per cent, a move intended to allay Japanese government intervention in the sale.
Banking groups SMBC and Mizuho will also each extend about 700 billion yen in loans to get it over the line, while Toshiba will maintain a 100 billion yen stake in the business.
Not surprisingly, neither Toshiba, nor WD were prepared to comment on the report.
It comes after talks between Toshiba and the preferred bidder stalled over payment schedules, with Toshiba demanding payment upfront and the Bain-led consortium, unsettled by the ongoing legal dispute between Western Digital and Toshiba, preferring to stage payments.
According to Reuters, after the negotiations with the Bain-led consortium reached an impasse, Toshiba re-opened talks with other bidders, including Taiwanese electronics manufacturer Foxconn. Japan's Nikkei business newspaper, meanwhile, claims that Toshiba CEO Satoshi Tsunakawa has told the company's lenders that it is now focusing on selling the unit to Western Digital with the aim of agreeing a deal by the end of August.
Now, though, Toshiba has swallowed its pride and prioritised talks with Western Digital: Toshiba needs to sell its flash memory business for about $18bn in order to cover catastrophic losses incurred by its bankrupt US nuclear power station business Westinghouse.
Toshiba needs to push through the sale before the end of its financial year in March 2018 or risk having its shares de-listed from the Tokyo Stock Exchange on financial grounds.
The Bain-led consortium also includes Development Bank of Japan and the Innovation Network Corp of Japan, a government-backed group, with South Korean semiconductor firm SK Hynix providing funding that it would no doubt turn into an equity stake at a later date.
Western Digital has drastically upped its original low-ball bids to more-or-less meet Toshiba's target price of two trillion yen (around $18bn). According to Reuters, in order to help fund the acquisition, it would also bring in private equity firm KKR & Co and the two Japanese organisations that are also part of the Bain-led consortium.
Western Digital co-owns NAND flash manufacturing facilities in Japan with Toshiba Memory Corporation, the business that Toshiba is currently auctioning off. Western Digital picked up the stake when it acquired SanDisk, a partner with Toshiba for 17 years, for $19bn in May 2016.
The cost of that deal, though, also meant that Western Digital has struggled to raise the funds to match other bidders in the auction process.
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