Western Digital Corp. (WD) has asked a California court to halt the sale of Toshiba Corp.'s semiconductor business pending the results of arbitration between the two companies on the matter.
WD said Wednesday (June 14) that several of its SanDisk subsidiaries are seeking preliminary injunctive relief in Superior Court in San Francisco, arguing that ani-transfer provisions in the agreements between the two companies require that Toshiba obtain WD's consent prior to any transfer of the memory chip joint ventures between the two companies.
Toshiba and Sandisk have been partners in NAND flash technology development and manufacturing since the late 1990s. WD acquired Sandisk for $19 billion last year.
The two firms have been trading barbs since Toshiba announced plans to sell most or all of its semiconductor business in order to offset losses by its U.S. nuclear power business. WD would like to buy Toshiba's semiconductor business and reportedly increased its offer for it to $18 billion or more in recent days.
WD last month requested arbitration with Toshiba at the International Chamber of Commerce seeking to unwind the transfer of Toshiba's chip business to a spin off for the the purpose of its sale. WD said Wednesday it is proceeding with the arbitration.
"Toshiba Corporation's attempts to circumvent our contractual rights have left us with no choice but to take this action," said Steve Milligan, WD's CEO, in a press statement. Milligan added that "left unchecked, Toshiba would pursue a course that clearly violates these rights."
Meanwhile, Toshiba plans to choose a winning bid this month and finalize the sale by June 28. In addition to WD, other suitors still considered to be in the running include a coalition led by the government-backed Innovation Network Corp of Japan (INCJ), a joint bid by Foxconn and partners including Apple and Dell, and a bid by Broadcom Corp. and U.S. equity firm Silver Lake Partners. The Broadcom-Silver Lake partnership has bid nearly $20 billion, according to reports.