Western Digital to offer 2 trillion yen for Toshiba chip maker

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Toshiba will announce its preferred bidder on Thursday (Source: Getty)

Western Digital plans to raise its bid for Toshiba’s chip unit, according to reports.

The American computer storage manufacturer will offer 2 trillion yen (£14.2bn) for the prized asset, Reuters reported, quoting an anonymous source.

Toshiba will decide who its preferred bidder is on Thursday.

Read more: Toshiba shares rise as Broadcom emerges as favourite for chip unit

The source said the purchase would take the form of a debt purchase to avoid competition concerns, Reuters reported.

US chipmaker rival Broadcom had previously emerged as the favourite to purchase the computer chip arm from Toshiba, despite interest from other major companies, including a possible bid backed by Amazon and Apple.

Toshiba was forced to sell off its chip business after its US nuclear power business, Westinghouse, was pushed into bankruptcy by massive losses.

Read more: This chart shows how far Toshiba has fallen this year

The Japanese conglomerate was forced to cover the losses, with a sale of its highly profitable chip unit, the second largest in the world, seen as the only way to prevent the venerable company from going under.

The widespread interest in the sale has boosted the prospects of Toshiba after the Westinghouse fiasco prompted shares to more than half in value since peaking above 465 yen in December last year.

The upcoming sale, and a much-needed cash injection, have boosted shares back up above 300 yen at the end of last week, with a 5.32 per cent rise on Friday as the bidding war heated up.