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Business deals

Western Digital might raise offer for Toshiba

Troubled Japanese company could get its 2tn yen asking price

TOKYO -- Western Digital -- which is trying to block Toshiba from selling its memory unit to a third party while also attempting to buy a stake in the subsidiary -- is now considering a sweeter offer, The Nikkei learned on Saturday.

In the proposal Western Digital is considering, the U.S. company would give up on acquiring a stake in Toshiba Memory at the time of purchase. Western Digital would still provide funding to Toshiba through a corporate bond deal. This could make it easier for the eventual acquisition to clear an anti-monopoly review.

Under this potential proposal, Western Digital would also pitch in more for Toshiba Memory, thus bringing the total purchase price close to Toshiba's requested "around 2 trillion yen" ($18.1 billion). Western Digital is trying to join a consortium led by the Innovation Network Corp. of Japan that would then bid for Toshiba Memory.

Western Digital CEO Steve Milligan and Toshiba President Satoshi Tsunakawa met on Friday. But the talks apparently did not go well, largely because Tsunakawa remained skeptical about the feasibility of Milligan's plan to join the Innovation Network-led consortium in a 1.9 trillion-yen bid for the chipmaker.

On Saturday, The Nikkei learned that Milligan may kick in more money so the consortium's bid would be at least 2 trillion yen.

Western Digital will likely have to obtain consent from its board and stakeholders before it could go ahead with the potential proposal. Milligan, however, wants to make any new bid by Thursday.

The U.S. company on May 15 filed a request with the International Chamber of Commerce's International Court of Arbitration to block Toshiba from selling the chip unit to a third party. It would retract the filing if Toshiba chooses the consortium and if Western Digital is involved.

(Nikkei)

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