SK hynix’s consortium tapped as preferred bidder for Toshiba

Toshiba Group (TOSYY.PK, TOSBF.PK) announced Wednesday that its board of directors resolved to select the consortium of Innovation Network Corporation of Japan, Bain Capital Private Equity LP, and Development Bank of Japan a preferred bidder in respect of the sale of Toshiba Memory Corporation or TMC.The consortium’s bid clears Toshiba’s minimum of 2 trillion yen, or $18 billion.Toshiba Memory Corp is being sold by the company to raise the funds to plug a financial black hole caused by the Chapter 11 bankruptcy protection filing of USA nuclear power station builder Westinghouse.According to Reuters, the group will comprise Japanese government-backed fund Innovation Network Corp, the Development Bank of Japan, and United States private equity company Bain Capital. South Korean chipmaker SK Hynix Inc (000660.KS) and the core banking unit of the Mitsubishi UFJ Financial Group Inc (8306.T) are to provide financing under the consortium’s proposal, sources have said.The Japan-U.S. -South Korean consortium led by the Ministry of Economy, Trade and Industry is competing with rival bidder U.S. chipmaker Broadcom Ltd. which teamed up with U.S. investment fund Silver Lake Partners.Toshiba said it would not comment on the auction process.Toshiba is expected to clinch an official agreement by June 28, when it holds a shareholders’ meeting.Western Digital, which jointly operates Toshiba’s main chip plant, has sought a court injunction to prevent its partner from selling its chip business without the USA firm’s consent. Chief Executive Steve Milligan said this month that Toshiba was violating contractual rights and had left the USA firm no choice but to pursue legal action.”The ball is now in Western Digital’s court”, a source said.Foxconn, the world’s largest contract electronics maker, is also a suitor.