Apple (NASDAQ:$AAPL) is in talks to back Bain Capital’s bid on Toshiba Corp’s (OTCMKTS:$TOSYY) memory chip unit. Apple’s plan to provide about $3 billion to the Bain Capital deal has caused Toshiba to favor Bain Capital’s bid. Toshiba is hoping to come to a final agreement this month.
Slowing down the deal is the current litigation faced by Toshiba by Western Digital (NASDAQ:$WDC). Western Digital, who inherited a partnership with Toshiba’s memory chip unit when they purchased SanDisk Corporation (NASDAQ:$SNDK) last year, has argued that it should have veto rights in any sale. In addition, Western Digital had sought support from the Japanese government in a rival bid.
However, the litigation may be nearing its end. Experts on the case say that a three panel arbitration will likely be assembled at the end of the month. With an expected arbitration of no more than 6 or 7 months, the case is expected to be settled before March 2018.
Last month, Japan’s Ministry of Economy encouraged Toshiba to accept Western Digital’s bid in order to quickly end the litigation. Toshiba’s executives, however, resisted the bid.
Apple’s interest in the group is due to a reliance on Toshiba’s memory chips for their iPhones and iPods. The deal would guarantee a continuous supply of the chips for the tech manufacturer’s products. Apple would also gain an equity stake in the company.
Shareholders reluctantly approved the sale of the memory chip unit in March due to pressure to raise funds for a March 2018 deadline. The deadline was set for the company to raise capital or see their stock delisted in the Tokyo Stock Exchange. Toshiba needs the finances after a disastrous attempt to enter the American nuclear market.
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