Toshiba sounds out SK hynix for joint Elpida bid: source

TOKYO Thu Apr 5, 2012 11:13am BST

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TOKYO (Reuters) - Toshiba Corp (6502.T) has approached SK hynix (000660.KS) of South Korea about bidding jointly for Japanese memory chip maker Elpida Memory, an industry source said, after its solo bid was reportedly less than that of U.S. firm Micron Technology (MU.O).

The Nikkei business daily said Micron, which had been discussing a tie-up with Elpida before the Japanese company went bankrupt, had offered at least 150 billion yen ($1.82 billion) in a first round of bidding that closed on March 30.

Elpida is the world's No.3 maker of DRAM chips, with a market share of about 12 percent in July-September, behind Samsung Electronics' (005930.KS) 45 percent and SK hynix's 22 percent, according to research firm IHS iSuppli.

Toshiba, Elpida and SK hynix all declined to confirm the report. Micron could not immediately be reached for comment.

Toshiba made a preliminary bid on its own, but was no longer in the running, a second source with knowledge of the matter told Reuters. Several sources said Micron, SK hynix and an investment fund also put in bids.

The Nikkei also reported that Toshiba executives recently visited SK hynix to propose a joint bid, under which the two would take an equal share of Elpida and secure a stable supply of dynamic random access memory (DRAM) chips for smartphones.

SK hynix is flush with cash following the takeover of Hynix by SK Telecom Co (017670.KS), the paper said, but the South Korean company may consider the offer given the Japanese government's preference for Toshiba to lead Elpida's turnaround, and Elpida's own preference for Micron as a partner.

Analysts have said bidders are likely to be more interested in Elpida's DRAM chips for smartphones and tablets, rather than chips for PCs where demand is falling as consumers increasingly switch to mobile devices.

SK hynix is the only company to confirm its preliminary bid for Elpida, which in February filed for protection from creditors with 448 billion yen ($5.4 billion) in debt.

Sources have said Toshiba is reluctant to take on all of Elpida's assets and was interested in a joint bid in a move that would also make it easier to gain government-backed funding.

A decision on the bidding for Elpida is expected as early as next month.

Toshiba shares closed 1.7 percent higher after earlier sliding to a 4-week low. It was the busiest day's trading in the stock for seven months. The broader Tokyo market .TOPX closed down a third of one percent.

($1 = 82.4600 Japanese yen)

(Reporting by Maki Shiraki, Nobuhiro Kubo, Chang-Ran Kim and Miyoung Kim; Writing by Chris Gallagher and Chang-Ran Kim; Editing by Matt Driskill and Ian Geoghegan)

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