SEOUL, Aug. 29 (Korea Bizwire) – SK Hynix is reportedly considering taking legal action against Toshiba after being rebuffed by the Japanese conglomerate during the auction process of a memory-chip unit without appropriate notice, according to sources close to the matter.
Industry sources on Tuesday said SK Hynix, which was once considered among the most likely bidders, has sent an official letter to Innovation Network Corporation of Japan (INCJ), the Development Bank of Japan (DBJ), and the Japanese Ministry of Economy, expressing regret over Toshiba’s handling of its chip unit sale process, the Asia Economy Daily reported.
According to the report by the Asia Economy Daily, an SK Group official said that a joint legal procedure with American investment firm Bain Capital Private Equity such as a petition for a provisional injunction is on the table if the Japanese conglomerate signs a deal with the business coalition of Western Digital, INCJ, DBJ and Kohlberg Kravis Roberts.
Though being a ‘preferred bidder’ doesn’t hold legal binding force, one SK Hynix source speaking to the Asia Economy Daily said changing a bidder without formally ending a negotiation process goes against business ethics and accused Toshiba of breaching a non-disclosure agreement during the negotiation process with Western Digital.
The South Korean-American-Japanese business coalition consisting of SK Hynix, Bain Capital Private Equity INCJ, and DBJ seemed to have had the upper hand over its Japanese-American counterparts led by Western Digital up until recently, when reports from Kyodo News said Toshiba and Western Digital reached a broad agreement on the Japanese company’s chip unit sale when the CEO of the American data storage company visited Japan.
According to insiders, the development of the deal comes after Western Digital agreed to accept Toshiba’s proposal to drop its legal actions against the Japanese company in order to reach a deal.
Hyunsu Yim (email@example.com)