Toshiba Corp. is all but guaranteed to miss a May 1 deadline to sell its memory chip business to a Bain Capital-led group, people familiar with the matter said, raising the chances it may consider other options that could yield billions of additional dollars for the unit.
Chinese regulators are now conducting a third review of the deal, which is due to be completed by May 28, said one of the people, who asked not to be identified because the discussions aren't public. The process was originally supposed to be wrapped up by March 31. Toshiba and Bain want to finalize the current agreement, but they can't wait forever, another person said.
Toshiba may be able to fetch a higher price for its semiconductor unit if it seeks alternatives to the ¥2 trillion ($18.6 billion) sale. The division is probably worth at least $22 billion to $24 billion now and Toshiba could realize that value through an initial public offering or a renegotiated sale agreement. The Tokyo-based company originally put the business on the block under duress when it needed billions to pay for losses in its nuclear operations, but it has since raised cash to alleviate those concerns. The possibility of an alternative scenario is increasing, according to Amir Anvarzadeh, senior strategist at Asymmetric Advisors in Singapore.