A woman walks behind the logo of Toshiba Corp in Tokyo September 30, 2015. (Reuters/Toru Hanai)
The sale has seen much last-minute jockeying by suitors, leaving the conglomerate little time to come to a decision by its shareholders meeting at the end of this month. Read more:
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Toshiba is seeking a minimum of $18 billion for the world’s second-biggest producer of NAND chips and wants to get the deal done as quickly as possible to help it cover billions of dollars in cost overruns at now-bankrupt nuclear unit Westinghouse.
Given the jockeying, Toshiba has given up on choosing a winning bid on Thursday to negotiate the deal, said a person with direct knowledge of the matter. Sources had said the company was aiming for a Thursday decision, though a spokeswoman insisted the deadline for the decision was the second half of June.
A state-backed fund, the Innovation Network Corp of Japan (INCJ), has been at the centre of trade ministry efforts to forge a successful bid that will keep the highly prized unit under domestic control. But the nature of its partnerships appears to be going through drastic changes compared to just last week.
Standard & Poor’s said on Thursday it remained poised to cut Toshiba’s CCC- long-term credit rating “because its plan to sell its memory business has yet to materialize and additional losses or financial burdens might still arise in connection with its U.S. nuclear power business.”
“Drawn-out talks over its sale raise the risk of further clouding the timing and amount of the sale if the market or conditions in which the business operates worsen more than the company assumes,” S&P said.
INCJ was part of a proposed bid tabled by U.S. chipmaker Western Digital last week that also included
U.S. private equity firm KKR & Co LP, sources familiar with the matter have said.
But other sources have also said INCJ is in talks with Bain Capital about bidding for the unit, as the U.S. private equity firm appears willing to put in more money than rivals.
The Asahi newspaper reported on Wednesday that INCJ was now in a consortium that included Bain, KKR, SK
Hynix as well as the Development Bank of Japan (DBJ).
Western Digital, which jointly operates Toshiba’s main chip plant but is now in a bitter dispute with the conglomerate over whether the auction can proceed without its consent, was not included.
The INCJ bid would also exceed 2 trillion yen ($18 billion), the newspaper said.
A person familiar with the matter told Reuters on Wednesday that SK Hynix would be providing a loan to help finance the bid although it would not be taking a direct stake. Another person briefed on the matter said the Asahi report was correct on the participants in the consortium.
The sources declined to be identified as they were not authorised to talk to the media on the matter.
Mana Nakazora, chief credit analyst at BNP Paribas, said the complexity of the situation now meant that the auction could only be settled with the government’s intervention.
“While the makeup of the Japan-U.S. consortium may well change, it’s increasingly unlikely that there
are other options,” she said.
Other suitors are also making last-minute pitches.
One source familiar with the matter said on Wednesday that Western Digital was still in talks with the trade ministry over their consortium. The California-based firm has decided to raise its offer to at least 2 trillion yen, a separate source said on the weekend.
The CEO of Foxconn told Reuters on Monday the Taiwanese firm was leading a group including Apple Inc, computing giant Dell Inc and Kingston Technology Co.
The highest reported bid so far is one from U.S. chipmaker Broadcom and its partner, U.S. private equity firm Silver Lake. They have offered 2.2 trillion yen, sources have said.
According to the Asahi report, INCJ, DBJ and Bain would each invest 300 billion yen in a special-purpose company to buy the unit, Toshiba Memory Corp.
Toshiba itself would contribute up to 100 billion yen and other Japanese firms a combined 140 billion yen, while KKR is considering putting in 100 billion yen, the Asahi said. It added that SK Hynix would lend 300 billion yen to the project and Bank of Tokyo Mitsubishi UFJ 400 billion yen.
Toshiba, SK Hynix, INCJ, Bain, KKR and a spokesman for the core unit of Mitsubishi UFJ Financial Group Inc declined to comment. The trade ministry and DBJ did not immediately respond to requests for comment.
Disruptive Technology Ups Cyber Security Threats: Study
“Number of records stolen the world over rose 53.6 per cent in 2016 from 2015 due to disruptions in the cyber security domain.” .Representative Image. (Photo: Reuters/Dado Ruvic)
“Number of records stolen the world over rose 53.6 per cent in 2016 from 2015 due to disruptions in the cyber security domain,” said the company’s maiden study on ‘State of Cyber Security Report, 2017’ here.
Flagging the macro, micro and meso trends in cyber security and disruptions, the study noted that data breaches in public resulted in high peaking of negative sentiments on social media against the enterprise concerned, indicating the post facto Twitter sentiment analysis.
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“A record 56 per cent of breaches reported had user credentials (passwords) as part of the types of data stolen, implying that damage could be perpetrated using the stolen data,” asserted the report.
Another highlight of the report said that, at 33.3 per cent, Angler, RIG and Nuclear were among the most observed exploit kits used by cyber criminals.
According to data analysis, 56 per cent of malware attacks in 2016 were due to Trojans, while viruses and worms were 19-20 per cent.
“Majority of the security products were vulnerable to exploitation and CISOs (Chief Information and Security Officers) have to track them 24×7,” noted the study.
Emergence of the new ‘Internet of Everything’, like connected cameras, cars, health and industrial automation devices proves to be a launch pad for the “hacking for hire” industry.
“Cyber security is becoming a priority for businesses. It has become critical to identify risks near real-time and empower stakeholders to take actions and decisions based on priority,” said the IT major in a statement citing the study report.
The Internet of Things (IoT) devices come with a low memory and processing footprint and have little security capabilities, including patching. Once “online” with an IP address, the devices are easy prey for hacking syndicates, who develop custom malware to take their control en masse and use them as a launch pad for cyber-attacks.
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Noting that responsibility for governance of data privacy was still centralised, lying with cyber officers for 71 per cent of enterprises, the report said privileged access to data was ranked the highest amongst data security controls.
The report also highlighted key findings on attacks, vulnerabilities and cyber defence useful for teams across cyber security strategy, operations and risk management.
“The report brought a mix of research and analysis on attacks, vulnerabilities, and cyber weapons and contrasts their impact on defence mechanism,” said Sheetal Mehta, Wipro’s Vice-President for cyber-security and risk services, in the statement.
The study was conducted in 11 countries across North America, Europe, Asia-Pacific, West Asia and South Asia interviewing 139 organisations in diverse industry sectors.