Western Digital Corp.'s "Marry Me, or I'll Sue" tactics may have actually worked.
After being tossed aside by Toshiba Corp. in favor of a Bain Capital LP consortium, the U.S. hard-drive maker is getting measured for a wedding tuxedo.
Cobbling together various media reports over the past few days, it seems that Western Digital could get a 15 percent stake in Toshiba's chip unit, with the Japanese company planning to hold a board meeting Thursday and sign the deal by Aug. 31. The price is 1.9 trillion yen ($17.4 billion), Kyodo reported.
Whatever the final details, the key point is that Western Digital is now the favored bidder.
That's quite a turnaround since June, when Toshiba picked Bain along with local consortium members Innovation Network Corp. of Japan and Development Bank of Japan. Outside of valuation and employee retention, one of the main reasons why Bain & Co. got the nod was "in respect to certainty of closing." Toshiba is in a hurry to sell, and the buyer with the most expedient transaction is key.
Western Digital and Toshiba had already been duking it out over the U.S. company's claim to priority rights to bid for the chip unit by virtue of a manufacturing joint venture. Toshiba disagreed, and a legal and public-relations battle ensued.
But that bickering couldn't paper over the fact that Toshiba badly needs money to shore up a balance sheet crippled by the collapse of a venture into nuclear power equipment. That was Western Digital's opening.
By laying siege to Toshiba in the courts, Western Digital could hold up any sale, letting the electronics maker go down to the wire. It's now been more than two months since Toshiba plumped for Bain.
Western Digital probably figured early on that it mattered less whether its legal argument was superior and more whether it had the patience. It would appear Toshiba now also understands that in any siege, time is the most powerful weapon.
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