Western Digital Moves to Court in a Bid to Block Sale of Toshiba Chip Unit

HIGHLIGHTS
WD has sought a court injunction to stop Toshiba’s chip unit sale
The court injunction details that Toshiba needs to take WD’s consent
Toshiba wants to complete the deal as quickly as possible
Western Digital Corp has sought a court injunction to prevent Toshiba Corp from selling its chip business without the US firm’s consent – a move that threatens to throw the fiercely contested auction into disarray.

The escalation in the spat between Western Digital, which jointly operates Toshiba’s main chip plant, and its business partner follows tense last-minute jockeying by suitors for the world’s second-biggest producer of NAND semiconductors.

According to a person familiar with the matter, the California-based firm has been left out of a new Japan government-led group being formed to bid for the unit.

Toshiba’s “attempts to circumvent our contractual rights have left us with no choice but to take this action,” Western Digital’s Chief Executive Steve Milligan said in a statement.

ALSO SEEJapan Urges Toshiba, Western Digital to Get Along as Chip Spat Flares

“Left unchecked, Toshiba would pursue a course that clearly violates these rights,” he added.

Western Digital has filed its suit with the Superior Court of California, seeking an injunction until its arbitration case against Toshiba is heard. It is concerned about how Toshiba, the Japanese government and other stakeholders are handling the auction process, a second source said.

The second source added it had submitted a revised bid on Wednesday that satisfies Toshiba’s requests on deal certainty and price but did not receive a favourable response. Toshiba has demanded at least JPY 2 trillion ($18 billion) for the unit.

Sources declined to be identified due to the sensitivity of the negotiations concerning the auction.

Toshiba said in a statement that it was proceeding with selecting a preferred bidder for its memory unit by the second half of June as planned and hoped to reach a definitive agreement on a sale by June 28.

Western Digital Moves to Court in a Bid to Block Sale of Toshiba Chip Unit

Toshiba wants to complete the deal as quickly as possible to help cover billions of dollars in cost overruns at its now-bankrupt Westinghouse nuclear unit and to dig itself out negative shareholders’ equity that could lead to a delisting.

Satoru Oyama, senior principal analyst at research firm IHS, said Western Digital’s argument made sense from a common-sense point of view and that developments were moving towards a worst-case scenario for the Japanese company.

“Toshiba has more to lose in the dispute because it is running out of time,” he said. “Toshiba and Western Digital eventually have to talk. They cannot afford to keep fighting when Samsung is taking advantage of the NAND market boom and investing massively.”

A third source familiar with the matter said Western Digital expects to get a ruling on its injunction request by mid-July and that arbitration cases generally take 16-24 months to resolve.

A state-backed fund, the Innovation Network Corp of Japan (INCJ), has been at the centre of trade ministry efforts to forge a successful bid that will keep the highly prized unit under domestic control. But the nature of its partnerships appears to be going through drastic changes compared to just last week.

It has been in talks with Bain Capital and the group now includes South Korea’s SK Hynix Inc, sources have said.

INCJ was, however, also part of a proposed bid tabled by Western Digital last week that also included US private equity firm KKR & Co LP, other sources familiar with the matter have said.

Other bidders include Foxconn, the world’s largest contract electronics maker. Foxconn, formally known as Hon Hai Precision Industry, is leading a consortium that includes Apple Inc computing giant Dell Inc and Kingston Technology Co.

The highest known bid so far is one from US chipmaker Broadcom and its partner, US private equity firm Silver Lake. They have offered JPY 2.2 trillion, sources have said.

Foxconn Says Apple, Dell Part of Its Bid for Toshiba Chip Business

HIGHLIGHTS

  • Apple, Dell, & Kingston are part of the Toshiba’s chip unit business bid
  • Toshiba said Amazon, Google, Microsoft, & Cisco too are a part
  • Toshiba is planning to sell its chip business unit

Apple Inc, computing giant Dell Inc and Kingston Technology Co are members of a Foxconn-led consortium bidding for Toshiba Corp’s chip unit, the CEO of the world’s largest electronics manufacturer told Reuters on Monday.

Terry Gou, Foxconn’s founder and chief executive, also said Amazon.com Inc was close to joining and that the Taiwanese firm was also in discussions with Google, Microsoft Corp and Cisco Systems Inc about their participation in the bid.

Foxconn Says Apple, Dell Part of Its Bid for Toshiba Chip Business

He declined to comment on the total size of the offer or say how much Apple and other US firms planned to invest in the bid.

“I can tell you Apple is in for sure,” Gou said in an interview, adding that its participation had been approved by the Chief Executive Tim Cook and Apple’s board of directors.

 

Foxconn, formally known as Hon Hai Precision Industry Co, and its Japanese unit Sharp Corp would have a combined stake of not more than 40 percent, he added.

Representatives for Apple and the other US firms named by Gou could not be immediately reached for comment outside of regular business hours. Sharp declined to comment.

BizEquity Partners with Equifax in a Bid to Democratize Business Valuations

What is your business worth? Do you have any idea?

BizEquity, an online provider of business valuation big data, recently announced it has entered into a strategic partnership with Equifax (NYSE: EFX), an information solutions and global insights provider, to help answer this very question. The companies say they’re offering a joint business valuation service that will help small business owners better understand what their businesses are worth and help financial professionals prospect more effectively.

BizEquity says it has valued over 33 million private businesses and distributes its patented cloud-based service through thousands of financial advisors. The company says the new partnership marks the next step in democratizing business valuations, bringing together Bizequity’s “pioneering valuation service” with Equifax’s platform that reportedly organizes, assimilates and analyses data on more than 820 million consumers and more than 91 million businesses worldwide.

“We are proud to team up with Equifax, a global leader in the world-wide data and insights business, to harness the power of billions of data elements and use this data to democratize knowledge for every small business around the world,” said Michael M. Carter, CEO of BizEquity, which is headquartered in Wayne, PA, but has offices in key markets around the world such as London, Singapore and Delhi.BizEquity Partners with Equifax in a Bid to Democratize Small Business Valuation

New Small Business Valuation Service

Business valuation knowledge is important for small business owners and financial advisors who want to optimize their ability to capitalize on a range of opportunities, such as business insurance and financing. With a significant number of businesses looking for financing and many proprietors planning retirement based on the sale of their companies, BizEquity insists this valuation knowledge is crucial.

Some 10 million businesses are actually expected to change ownership over the next 10 years and will need business valuation services that are mainly provided by financial institutions and advisors, according to the press release announcing the BizEquity and Equifax partnership. The partnership hopes to change this by jointly distributing the BizEquity valuation service to hundreds of thousands of small businesses.

“By jointly distributing the BizEquity service, targeting over 900,000 financial professionals, we’ll both innovate and disrupt by delivering value to the commercial market,” Carter said in the announcement.

As part of the agreement, Equifax says it will license certain data assets that include financial and business details of some 80 million companies to BizEquity to pre-value over 71 million private businesses using its patented cloud-based valuation platform that harnesses sophisticated algorithms and big data knowledge. This will enable financial professionals, such as bankers, financial advisers and wealth managers, to provide their clients and prospects with real-time insight into the fundamental questions of what their businesses are worth and how they are performing — in a fraction of the time it takes to accomplish a traditional business valuation, the partnering firms revealed in the announcement.

Highlights of the new valuation service include providing financial professionals and small businesses with:

  • Innovative big data analytics,
  • A reliable and viable technology platform,
  • The ability to build stronger client relationships,
  • Key business contact details, and
  • Prospecting intelligence and lead engagement.

“Combining our market-leading data assets with BizEquity’s award-winning technology is an excellent strategic relationship and an example of how Equifax continues to create innovative alliances,” said Joy Wilder Lybeer, senior vice president of Enterprise Alliances at Equifax. A company headquartered in Atlanta, Ga, Equifax has grown from a consumer credit company into a leading provider of insights and knowledge helping its customers make informed decisions.

Image: BizEquity