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New threat to Toshiba's chip unit sale plans

Thursday, June 15, 2017 - 01:24

Western Digital Corp has sought a court injunction to prevent Toshiba Corp from selling its chip business without its consent - a move that threatens to throw the fiercely contested auction into disarray. As Laura Frykberg reports, the news sent Toshiba shares down another six percent.

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Toshiba's been offered top dollar for its U.S. chip business... it could even achieve the asking price of 18 billion dollars. But legal action by it's U.S. partner Western Digital - could see that figure fall... preventing the Japanese company raising the funds it needs to recover from a bad nuclear investment in the US. (SOUNDBITE) (English) CHIEF INVESTMENT OFFICER, CCLA INVESTMENT MANAGEMENT, JAMES BEVAN, SAYING: "This is a company that courtesy of its Westinghouse nuclear legacy business is in a real mess. And it does have to resolve the situation quickly. It has to get the cash in otherwise it indeed risks being delisted." Western Digital is seeking a court injunction... Saying selling the world's second largest producer of NAND semi-conducters without its consent violates contractual rights. It wants to buy the business itself - but for less money. (SOUNDBITE) (English) CHIEF INVESTMENT OFFICER, CCLA INVESTMENT MANAGEMENT, JAMES BEVAN, SAYING: "That would be a haircut in terms of value but maybe that is the price that they will have to pay for getting the deal done. " Toshiba's says it's proceeding with its preferred bidder as planned and hopes to have a sale agreement by the end of the month. It certainly doesn't have time for a long legal battle. It's in negative shareholders' equity and that could lead to a delisting.

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New threat to Toshiba's chip unit sale plans

Thursday, June 15, 2017 - 01:24