SEOUL, Sep. 28 (Korea Bizwire) – Despite earlier reports, SK Hynix officials have denied speculation that the South Korean memory chip maker is considering taking legal action against Toshiba as the Japanese conglomerate moves toward a deal with Western Digital, the South Korea media reported.
Contrary to a number of reports in the South Korean media that SK Hynix could head into a legal battle with Toshiba over the handling of its chip unit sale, another source close to the South Korean chip maker said there is no talk of legal action against the Japanese conglomerate, South Korean media outlet Newsis reported.
The comment solidifies the fact that being a ‘preferred bidder’ doesn’t hold any legal binding force, which made the alleged claims of legal action by SK Hynix unlikely in the first place.
According to the inside source at SK Hynix, it is unclear whether Bain Capital Private Equity, the other party in the joint bid for Toshiba’s memory chip business, has backed down from taking legal action against the Japanese company.
Reports by Japan newspaper Nihon Geiza Simbun on Wednesday say the board of directors at Toshiba is set to give exclusive bargaining rights to a Japanese-American business coalition led by Western Digital with the prospect of signing a final deal sometime in September.
If the negotiation process goes as reported, talks with the other two likely bidders including the Korean-Japanese-American coalition consisting of SK Hynix, Bain Capital Private Equity and Taiwan’s Foxconn will be terminated.
It has been reported previously that the deal developed quickly after Western Digital agreed to take on Toshiba’s offer to drop its legal action against the Japanese company as part of efforts to reach an agreement.
Some industry sources say it is possible that Bain Capital Private Equity could pursue a legal battle against Toshiba on its own given the company’s more significant capital investment, but the likelihood of stopping Toshiba’s deal with Western Digital is low as there is little legal ground for Bain to stand on.
As Toshiba inches towards a deal with Western Digital, and with SK Hynix’s efforts to expand its presence in the NAND flash memory market effectively thwarted, the South Korean chip maker is being urged to come up with other ways to reinforce its competitiveness including an increase in infrastructure investment.
Ashley Song (email@example.com)