Accelerating Acquisition Process: SK Hynix Will Reportedly Give Up Its Voting Rights on Toshiba Memory | BusinessKorea

Wednesday, November 22, 2017

Japan-based Jiji Press reported that SK Hynix would give up its voting rights and take part in the form of giving a loan.
Japan-based Jiji Press reported that SK Hynix would give up its voting rights and take part in the form of giving a loan.
SEOUL,KOREA
17 July 2017 - 2:45am
Michael Herh

A report that SK Hynix will give up its voting rights on Toshiba Memory, a semiconductor subsidiary of Toshiba, is accelerating the acquisition of Toshiba Memory.

Japan-based Jiji Press reported that SK Hynix would give up its voting rights and take part in the form of giving a loan. Toshiba is reportedly stepping on it with a view to concluding a contract this month based on this.

Jiji Press commented that SK Hynix’s decision rid an element that made it difficult for the Korea-US-Japan alliance from making the final adjustment, making the alliance take one more step towards the sell-off of Toshiba Memory.

But Park Sung-wook, vice chairman of SK Hynix, met reporters on July 12 and said, "We are not considering giving up the takeover at all. We continue talking about acquiring a stake." So it seems that it will take some time to make a decision. "We cannot confirm anything about the report," an SK Hynix representative said.

The Korea-US-Japan alliance, which includes SK Hynix, was selected as the preferred bidder for Toshiba Memory sale last month. However, the alliance has faced difficulties in the final negotiation process as legal battles have ensued due to a conflict surrounding SK Hynix's demand of voting rights and Western Digital (WD)’s lawsuit against the sale of Toshiba Memory.

SK Hynix is ​​said to be adjusting its plans to participate in an SPC recently established with Bain Capital by owning convertible bonds. In this case, SK Hynix will secure a third of voting rights on Toshiba Memory, which will affect the management of the latter. This can make Japan concerned about a technology leak to overseas companies and a prolonged antitrust review.

Meanwhile, the Californian Federal Court in San Francisco of the US collected opinions from both sides in the first trial in a lawsuit against the sale of Toshiba Memory filed by WD on July 14. However, as the conflict surrounding the issue was complex, the court decided to postpone the final verdict and hold an additional hearing on July 28.

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