The Nikkei Asian Review reported that Toshiba is considering CVC Capital Partners’ proposal for an over 20 billion U.S. dollar acquisition offer, which depends to a large extent on the value of memory chips, the former “jewel in the crown” of the Japanese industrial group.

Analysts estimate that the market value of the unlisted Kioxia is about 1.2 trillion yen ($11 billion) to 2.6 trillion yen. This means that the value of 40% of Toshiba's shares may be between 500 billion yen and 1 trillion yen.

This wide difference is due to fluctuations in the price of memory chips. To evaluate CVC's bid, you need to understand the value of Kioxia. CVC’s bid is believed to be 5,000 yen per share, or 2.3 trillion yen, a premium of about 30% over the undisturbed price.

Kioxia is one of the world's largest suppliers of NAND flash memory. Last year, the company cancelled its IPO due to the uncertainty of earnings caused by the blacklisting of Huawei in the United States. Due to the suspension of shipments to Huawei, Kioxia’s valuation fell to around 1.5 trillion yen, a 30% drop from its initial valuation.

Although Kioxia has not fully restarted sales to Huawei, another factor is at play: during the epidemic, global semiconductor equipment demand surged, accelerating the transition to digital work and education.

According to the "Wall Street Journal" report, Western Digital and Micron bid for Kioxia this year, and valued the Japanese company at approximately US$30 billion (approximately 3.3 trillion yen).

Coupled with the analyst's estimate of the value of Kioxia and the overall valuation of Toshiba's business, the total is about 2.8 trillion yen. The latter estimate is based on analysts' estimates of Toshiba's various divisions.

On Tuesday, Toshiba, which was listed in Tokyo, had a market value of about 1.74 trillion yen, after which the company confirmed the Nikkei News report on the CVC acquisition proposal. Since then, Toshiba shares have risen in the Tokyo stock market, closing at 4,510 yen on Thursday, with a market value of 2.05 trillion yen.

Kota Ezawa of Citigroup Global Markets Japan said: “Ordinary institutional investors may think that 5,000 yen is an attractive price and approve the acquisition, but activists believe that Toshiba’s value is much higher and are unlikely to accept this offer. ."

At the same time, Toshiba seems to be actively considering CVC's offer. Taking into account the company's involvement in government operations and long-term infrastructure projects, Toshiba will set up an inter-departmental team led by Senior Executive Vice President Masayasu Toyohara to determine how the ownership of the fund will affect its contracts and credit policies.