Toshiba (6502.JP) has hit back at joint venture partner Western Digital Corp (WDC), saying it overstated its rights over the NAND memory-chip manufacturing unit that the Japanese company is trying to sell.
Toshiba on Wednesday signed a memorandum of understanding (MOU) with a Bain Capital-led consortium for the sale of its memory chip business. The two parties said they would enter negotiations with the intent of reaching a definitive agreement by the end of the month. No other details were disclosed but reports put the sale price at USD18 billion. The consortium also includes Apple, Seagate and Dell, according to a Wall Street Journal report.
In response to the MOU, Western put out its own statement expressing its surprise that Toshiba would look to do a deal with Bain "without SanDisk's consent, as the language in the relevant JV agreements is unambiguous, and multiple courts have ruled in favor of protecting SanDisk's contractual rights."
Western added, that its remained "confident in our ability to protect our JV interests and consent rights."
Hitting back, Toshiba said in a statement:
Toshiba regrets that Western Digital persistently overstates its limited consent rights in public statements. As Toshiba has previously stated, the confidential agreements between SanDisk and Toshiba provide no reasonable basis for Western Digital's assertions that it is entitled to prevent a sale of TMC. Toshiba is also disappointed by Western Digital's misleading statements regarding the outcome of ongoing litigation between the two companies concerning SanDisk's purported consent rights: the parties have merely agreed, before a single court, to provide notice when an agreement for the sale of TMC is signed-and prior to a related closing-for a limited period of time, until arbitration between the companies is underway.
Toshiba expects and is fully committed to completing a sale of TMC by March 2018, and looks forward to a favorable resolution of SanDisk and Western Digital's exaggerated claims in arbitration.
Toshiba is selling its memory-chip division to help cover big losses at U.S. nuclear business Westinghouse, which filed for bankruptcy in March. Toshiba's liabilities exceeded assets by nearly $5 billion as of June 30.
Shares in Toshiba are down almost 4% at JPY316 a share in Thursday afternoon trading. They have gained 12.7% year-to-date