The consortium led by private equity firm Bain Capital has increased its bid for Toshiba Memory Corporation in a bid to regain the initiative in the auction of the Japanese company's highly rated semiconductor business.
It comes after a rival group led by Western Digital appeared to have taken pole position in the race to acquire the highly rated company.
The relationship between Western Digital, which was a 50 per cent share stake in Toshiba's NAND flash factories in Japan, acquired following its $19bn acquisition of SanDisk, deteriorated this year as WD tried to strong-arm Toshiba into accepting its bid.
The relationship between the two companies has since improved, with Toshiba opening negotiations with Western Digital over the prospect of a deal.
However, the Bain-led consortium, which also includes SK Hynix, the South Korean chip maker, has not yet folded. It has filed an increased bid of around ¥2.4 trillion ($22.3bn), compared with an original bid of about ¥1.9 trillion on the table from Western Digital.
According to Reuters, the Western Digital-led consortium has also increased its bid, but now needs to allay Toshiba's fears that its bid could be embroiled in an investigation with anti-trust authorities, either in Japan or elsewhere, given its dominance of the hard-disk storage market and its ownership of NAND flash brand SanDisk.
In addition to the bids led by Bain Capital and Western Digital, a third bidding consortium, led by Foxconn, is also in the running.
Its bid, though, is likely to be rejected on the grounds of Foxconn's close connections with China, which would almost certainly entail an investigation by the Japanese government before it is allowed to go ahead.
According to Reuters, the Bain bid would give the private equity firm 49.9 per cent of initial voting rights in the business, while Toshiba would retain a 40 per cent stake. Sundry Japanese companies would hold 40.1 per cent, enabling the consortium to argue that Toshiba Memory Corporation remains in Japanese hands.
SK Hynix is providing finance, but it is possible that this could be turned into a share stake at a later date, after the deal is approved by the Japanese government.
Apple, meanwhile, is lurking in the background of all three consortia, using its vast cash reserves to help fund the winning bidder.
Given the supply pinch in memory and NAND flash chips, Apple is keen to ensure it is on the winning side in order to ensure an uninterrupted supply for its popular smartphones, tablet computers, laptops and desktop computers.
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