Uncertainty mounted over South Korea’s SK hynix’s bid in the ongoing Toshiba sale on Sunday with unverifiable claims swirling around that the Korean memory chipmaker has already given up on acquiring a stake in the Japanese firm’s flash memory unit.

Since a global consortium of US private equity firm Bain Capital, two state-backed Japanese financial institutions and SK hynix, the preferred bidder, failed to ink a $18 billion deal on purchasing the NAND flash memory unit of Toshiba on June 28, suspicions have continuously been raised that the deal is going nowhere.

The suspicions peaked on Sunday as a Japanese news agency reported SK hynix gave up on its acquisition of a stake guaranteeing a voting right for Toshiba, which was strongly denied by sources familiar with the matter.

“Considering the ongoing talks, such reports sound false or exaggerated,” said a source requesting anonymity. “Some related parties are seemingly using the media to lead the deal to a direction they want.”

SK hynix officials, meanwhile, declined to comment regarding the issue. 

SK hynix’s official stance on the Toshiba deal remains aligned with its CEO Park Sung-wook’s remarks made last Wednesday.

To a question of the possible surrender of SK hynix’s bid to win a Toshiba stake, Park told reporters, “The company is not considering the option at all, and is still talking (with Toshiba) to acquire a stake.”

Some speculate that the talks between Bain-led consortium and Toshiba fell into a deadlock on June 28, because of SK’s proposal to fund the deal through convertible bonds worth about $4.6 billion, which is deemed a step that could eventually give SK hynix an equity interest in Toshiba. The $4.6 billion is about a fourth of the total purchase value.

Toshiba and Japanese government authorities still want to keep the company’s technologies under domestic control, protecting them from Asian rivals such as SK hynix and Taiwan’s Foxconn.

“If the speculation turns out to be true, SK giving up on acquiring the stake may help break through the stalled negotiations,” said an industrial insider.

One of reasons that the consortium couldn’t sign the deal last month was a serious disruption by rival US-based Western Digital, a long-time partner of Toshiba.

Following Toshiba’s pick of the preferred bidder, the US chipmaker sued Japanese partner with a San Francisco court, asking the court to order an injunction to stop the current sale of the flash memory unit and a temporary restraining order forcing Toshiba to give its workers access to shared databases.

The US court gave Western Digital access to Toshiba’s databases last Wednesday, but postponed its decision on the injunction to stop the sale.

Western Digital is back in talks with Toshiba about the sale, according to Reuters.

By Song Su-hyun (song@heraldcorp.om)