Toshiba chooses US-Japan bidder for memory chip biz sale

TOKYO (AP) — Money-losing Toshiba Corp. said Wednesday that it has chosen a U.S.-Japan consortium as the preferred bidder in the sale of its lucrative memory chip business, but hurdles remain as an American joint-venture partner is opposing the move.

Toshiba sorely needs the sale, with its U.S. nuclear unit Westinghouse Electric Co. racking up massive red ink and filing for bankruptcy protection.

Tokyo-based Toshiba said the board of directors selected the bid, totaling about 2 trillion yen ($18 billion), from the consortium of Innovation Network Corp. of Japan, Bain Capital Private Equity and the Development Bank of Japan in the sale of Toshiba Memory Corp.

"Toshiba has determined that the consortium has presented the best proposal, not only in terms of valuation, but also in respect to certainty of closing, retention of employees and maintenance of sensitive technology within Japan," it said.

The Innovation Network Corp. of Japan is made up of 26 big-name Japanese corporate investors, including Sony Corp., Canon Inc., Toyota Motor Corp. and Sumitomo Mitsui Banking Corp. Bain Capital Private Equity, based in Boston, is one of the world's leading investment firms.

Without a complete overhaul of its organization, Toshiba will have a very difficult road to recovery of its reputation and trust, essential ingredients to its existence, said Shuri Fukunaga, chief executive of Burson-Marsteller Japan, a communications consultancy firm that helps companies in crises.