Western Digital (WDC 84.50, -1.51) is down 1.8% in pre-market as technology stocks see a continuation of their weakness from Friday. The storage company found its way into the weekend news flow, as Japan Times reported Western Digital is considering bidding more than JPY2 trillion for Toshiba's (TOSBF) flash memory unit.
Toshiba has shopped its chip unit for months, but finding a suitor has been elusive. Interested parties understand that Toshiba needs cash, which has weakened the company's negotiating position.
Toshiba's chip unit has reportedly drawn past interest from tech giants like Apple (AAPL), Alphabet (GOOGL), and Amazon (AMZN), but recent reports have suggested Western Digital may end up with Toshiba's flash memory unit, after all.
Early last week, it was reported that Western Digital is emerging as a favorite to strike a deal with Toshiba. This was followed by reports that Bain Capital will replace KKR in a consortium that will include Western Digital and Innovation Network Corp of Japan. Yesterday, Japan Times reported that Western Digital may raise its bid above JPY2 trillion after its JPY1.60 trillion bid was deemed insufficient.
Toshiba has reportedly received another bid of more than JPY2 trillion from Broadcom (AVGO), a company whose business has little overlap with Toshiba's flash unit and would be unlikely to draw regulatory scrutiny. However, Western Digital—Toshiba's long-time partner—has opposed a sale to a third party.
Toshiba is expected to make a decision regarding the sale of its chip unit by Thursday. Shares of Toshiba spiked 9.8% in Tokyo, rising to levels not seen since late December.