Toshiba Corp. (NASDAQ:$TOSYY) has failed to meet a target date to sell its $18 billion business for the third time on Wednesday. The company had been in talks with various companies for months now, with Western Digital Corp (NASDAQ:$WDC) as the main contender. However, Toshiba seems like it may have finally found the suitor: Bain Capital.
Toshiba is the second-biggest producer of NAND memory chips. Without an agreement soon, the third delay will jeopardize Toshiba’s end of the financial year in March. The company is in dire need of funds to cover billions in liabilities at its U.S. nuclear unit.
Toshiba officially stated that the company has signed a memorandum of understanding with Bain to accelerate discussions, and hoped to reach a final decision in late September. However, this memorandum is not legally binding.
As for Western Digital Corp, sources from Toshiba had stated that they “feared its partner was angling to eventually take over the chip business, sought to limit the U.S. firm’s future stake in the unit”.
The Bain group’s latest offer is worth 2.4 trillion yen, or $22 billion, including a 200 billion yen investment in infrastructure.
Still, it remains uncertain whether Toshiba will be able to reach a final decision, and a final transaction by the end-March considering its pattern of indecisiveness. If the company does fail to secure sufficient financing by the end-March, it will have to report negative net worth, or liabilities exceeding assets, for a second year running. That means Toshiba would be de-listed from the Tokyo Stock Exchange.
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