Activist fund says Toshiba chip unit worth as much as $40 billion

- Reuters, TOKYO

Apr 8, 2018-

A Hong Kong-based activist investment fund said Toshiba Corp’s chip unit was worth as much as $40 billion, double the sale price agreed with a Bain-led consortium, as it escalated its opposition to the deal. Argyle Street Management is seeking to persuade Toshiba to either negotiate a higher price or list the unit, highlighting concerns that the Japanese conglomerate agreed to sell it too cheaply while in the throes of a financial crisis last year.

The fund, which has $1.3 billion under management, says other 

activist investors are on its side, but it is not clear how much support it has garnered. Argyle has also not disclosed the size of its stake in Toshiba. Toshiba Memory, the world’s No. 2 producer of NAND chips, is due to be sold for 2 trillion yen ($18.6 billion) but Argyle argues the unit is worth 3.3 trillion yen to 4.4 trillion yen, citing an valuation analysis by a third-party Japanese firm. “The suggested range is in line with views of most analysts,” said Hideki Yasuda at Ace Research Institute, who values the unit at nearly 4 trillion yen and believes Toshiba should not sell. The sale failed to close by an agreed March 31 deadline as the two sides are still waiting on regulatory approval from China. That gives Toshiba the option of cancelling the sale without penalty, and the industry and bankers are waiting to see how much momentum Argyle will gain in its campaign. 

Published: 08-04-2018 14:34

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