Japan-U.S. Team to Offer 2.1 T. Yen for Toshiba Chip Biz

Tokyo, June 14 (Jiji Press)--A Japanese-U.S. consortium has decided to boost its bid for Toshiba Corp.'s <6502> flash memory unit to around 2.1 trillion yen in hopes of defeating rival Broadcom Ltd., informed sources said Wednesday. Four to five Japanese companies are also considering making investment by joining the team led by state-backed Innovation Network Corp. of Japan, according to the sources. Toshiba has hoped to make a decision Thursday as to which bidder should be awarded preferential negotiating rights. Now, the struggling electronics and machinery giant is seen delaying the decision to June 21 or later. Toshiba wants to strike a deal to sell Toshiba Memory Corp. before the end of this month. To maintain financing from its creditor banks, Toshiba needs to decide the buyer of the flash memory unit as soon as possible and present plans to resolve its negative net worth. Broadcom is a major U.S. chipmaker, but it does not manufacture flash memory products. That would make it easy for its possible acquisition of the Toshiba unit to clear antitrust screenings. In addition, Broadcom has offered to buy Toshiba Memory for over 2 trillion yen, meeting Toshiba's hope to sell the unit as soon as possible and at the highest price available. A financial source views Broadcom as the leading candidate. Meanwhile, the Japanese-U.S. consortium, also including U.S. investment firm Kohlberg Kravis Roberts & Co., appears to have fallen behind rivals because it offered only 1.8 trillion yen. To overcome this weakness, the alliance is seeking investment from U.S. investment fund Bain Capital and loans from South Korean chipmaker SK Hynix Inc. As a result, the team's bid is seen rising to around 2.1 trillion yen. Furthermore, four to five Japanese companies are considering investing a total of 50 billion yen. Toshiba is also expected to make an investment. Another candidate Western Digital Corp., Toshiba's U.S. memory business partner, is examining possible participation in the Japanese-U.S. consortium, which seems favored by the Japanese government, concerned about possible leaks of Toshiba's memory technologies to China, Taiwan or others. END