Confirmation of that has arrived in the shape of a Q&A posted on WD’s website. The document leaves no doubt that WD – which acquired SanDisk in a $19billion deal last year – isn’t going to go quietly. Even before Toshiba announced the deal with the Bain-SK Hynix consortium, it had started an arbitration process intended to resolve its dispute.
Toshiba has said it can close the deal, no matter what the arbitration process determines. Wrong, says WD.
‘The JV agreements are clear that Toshiba cannot transfer any of its interests in the JVs – for example, its equity in the JVs, its managerial and control rights, its contractual rights under the JV agreements, and its rights to receive output from Yokkaichi – without SanDisk’s consent.
‘Toshiba implies that arbitration only seeks to prevent the transfer of its equity, in which case it still intends to close, even if it loses.
‘Toshiba ignores that the arbitration seeks to prohibit the transfer of any JV interests without SanDisk’s consent. Because Toshiba transferred other JV interests, such as its managerial and control rights in the JVs, Toshiba cannot close its transaction if SanDisk prevails’.
SanDisk is seeking an interim injunction to stop the deal until the arbitration process concludes. At that point, WD says it intends to seek a permanent injunction.
Part of WD’s arguments relate to the members of the Bain consortium. It says that SK Hynix, Seagate and Kingston Technologies are competitors.
‘Toshiba is contractually prohibited from working with other companies to manufacture BiCS or other NAND flash memory being developed or manufactured in the SanDisk-Toshiba JVs’, WD asserts.
Needless to say, this spat isn’t going to be resolved quickly; WD believes ‘a final ruling may not occur until 2019’.
Baseball player Yogi Berra, famous for his so called ‘Yogiisms’ once said ‘it ain’t over til it’s over’. Lawyers around the world are going to make a lot of money from this dispute and Toshiba is going to be more than inconvenienced as it looks to balance its books.
