Toshiba Says Western Digital Persistently Overstates Its Limited Consent Rights

(RTTNews) - Japanese conglomerate Toshiba Corp.(TOSYY.PK, TOSBF.PK) late Wednesday responded to Western Digital Corp.'s (WDC) statement that expressed disappointment over Toshiba's plans to sell its memory-chip business. Toshiba said it regrets that Western Digital persistently overstates its limited consent rights in public statements.

Earlier in the day, U.S. private-equity firm Bain Capital Private Equity LP signed a memorandum of understanding with Toshiba, intending to reach a deal to buy the memory-chip business by a Bain-led consortium. Toshiba said it retained the right to negotiate with other bidders.

In response, Western Digital, a provider of storage technologies, said it is disappointed over Toshiba's plans to transfer its interests in its NAND flash-memory joint ventures operated with Western Digital's SanDisk subsidiaries. The company said it remains confident in its ability to protect JV interests and consent rights.

Toshiba in its latest statement said that the confidential agreements between SanDisk and Toshiba provide no reasonable basis for Western Digital's assertions that it is entitled to prevent a sale of Toshiba Memory Corp. or TMC.

"Toshiba is also disappointed by Western Digital's misleading statements regarding the outcome of ongoing litigation between the two companies concerning SanDisk's purported consent rights: the parties have merely agreed, before a single court, to provide notice when an agreement for the sale of TMC is signed—and prior to a related closing—for a limited period of time, until arbitration between the companies is underway," the company said in its statement.

Toshiba said it expects and is fully committed to completing a sale of TMC by March 2018, and looks forward to a favorable resolution of SanDisk and Western Digital's exaggerated claims in arbitration.

In Japan, Toshiba shares were trading at 320 Japanese yen, down 3.32 percent.