By Takashi Mochizuki
Foxconn Technology Group /zigman2/quotes/204111604/delayed TW:2354 -0.36% of Taiwan has told Toshiba Corp. /zigman2/quotes/205628942/delayed JP:6502 0.00% that it is ready to pay as much as 3 trillion yen ($27 billion) for Toshiba’s computer-chip business, people familiar with the matter said, another bold bid for a pillar of Japan’s high-tech industry.
The Taiwanese company, the world’s largest electronics contract manufacturer and an assembler of Apple Inc. /zigman2/quotes/202934861/composite AAPL +0.55% products, used a similar strategy last year to win control of Sharp /zigman2/quotes/203224600/delayed JP:6753 +0.83% It put forth a bid price well beyond what others were offering and ultimately beat out a Japanese government-backed investment fund.
The latest bid by Foxconn, formally known as Hon Hai Precision Industry Co. , could put the government of Japanese Prime Minister Shinzo Abe in a tough spot. Some in the government are hoping to see a Japanese company or a joint U.S.-Japan team take the prized Toshiba asset because they see the chip business as strategic, say people familiar with the matter. But it would be hard for financially strapped Toshiba to turn down extra cash if Foxconn has the highest bid.
Analysts have estimated the business’s fair value at between ¥1.5 trillion and ¥2 trillion. One person familiar with the matter said the next-highest bidder after Foxconn offered about ¥2 trillion when initial bids for the business were accepted in late March.