Toshiba Corp said yesterday it has agreed to focus on selling its prized chips unit to a group led by Bain Capital and South Korean chipmaker SK Hynix, although it is not ruling out a deal with other bidders.
The announcement came after sources said on Tuesday that Toshiba was now favoring the Bain group after failing to bridge disagreements with rival suitor Western Digital Corp.
Yesterday marks the third time the embattled Japanese conglomerate has failed to meet a target date to sell the US$18 billion (HK$140.4 billion) business - the world's second-biggest producer of NAND memory chips.
Without an agreement soon, it will be difficult for Toshiba to gain by the end of the financial year in March, regulatory approval and hence the funds it needs to cover billions in liabilities at its US nuclear unit.
Toshiba said in a statement it had signed a memorandum of understanding with Bain to accelerate discussions, and hoped to reach agreement in late September. But it added that the memorandum was not legally binding and did not prevent it from negotiating with other parties.
A representative for Bain was not immediately available for comment, while SK Hynix declined to comment.
Western Digital, which jointly invests in Toshiba's key NAND memory plant but which has been at loggerheads with the Japanese firm for much of the auction - said it was disappointed as well as surprised at the development given its legal position.
"We remain confident in our ability to protect our JV interests and consent rights," the California-based firm said in a statement.