Bain Capital aims to list Toshiba chip unit in three years

World
Europe

US private equity firm Bain Capital LP on Thursday said it aims to list Toshiba Corp’s chip unit on the Tokyo Stock Exchange within three years, to cash in its investment after leading an 18 billion US dollar acquisition of the business.

Bain, whose consortium signed the purchase deal last week, also said it hopes to settle legal disputes over the transaction at an early stage with Western Digital Corp, Toshiba’s joint venture partner.

Toshiba aims to complete the sale by the end of its fiscal year in March. It plans to use the proceeds to plug a hole in its balance sheet caused by the bankruptcy of its US nuclear power subsidiary, and save itself from potential delisting.

In the first news conference since the signing, Yuji Sugimoto, head of Bain Capital in Japan, told reporters on Thursday that Bain hopes to maintain stability at the chip unit through contracts with Apple Inc, a major client and member of the buyout consortium.

Yuji Sugimoto, head of Bain Capital in Japan speaks during a news conference in Tokyo on October 5, 2017. /VCG Photo

“We have already made (antitrust) filings for regulatory approvals globally. We are making utmost efforts to close the deal by the end of March,” Sugimoto told reporters.

The sale, however, faces legal challenges from Western Digital, which offered a rival bid and is seeking an injunction to block any deal that does not have its consent.

Western Digital paid some 16 billion US dollars last year to acquire SanDisk, Toshiba’s chip joint venture partner since 2000. It sees chips as a pillar of growth and so is keen to keep the business out of the hands of rival chipmakers.

“Western Digital remains an important JV partner,” Sugimoto said. Bain “will help solve the legal disputes (between Toshiba and Western Digital) and help them grow together.”

But he said Bain aims to close the deal even if the disputes are not resolved beforehand.

The logo of troubled conglomerate Toshiba at the headquarters in Tokyo. /VCG Photo

Toshiba has said the joint venture is a tiny portion of the chip unit and that it can sell the business without the joint venture. Western Digital disagrees.

For Bain, the deal is part of an aggressive expansion strategy in Japan. Only days after the Toshiba deal, Bain announced a 1.4 billion US dollar bid for Japan’s third-largest advertising agency, Asatsu-DK Inc, in one of the largest buy-outs in the country this year.

2105km

Source(s): Reuters