Japanese fund building cash in possible Toshiba bid prep

|By:, SA News Editor

State-backed fund the Innovation Network Corp. of Japan will sell a stake in Renesas Electronics (RNECY -4.9%) worth about $2.7B in what observers see as a sign that it's readying an investment in the chip unit at Toshiba (TOSYY -0.3%).

That would likely be part of a consortium with another suitor that would have a key advantage over others -- including Foxconn (OTC:FXCOF, OTC:HNHAF), Broadcom (AVGO +2.5%) and Western Digital (WDC +0.7%) -- as it would keep important semiconductor technology inside Japan.

INCJ has been considering a partial exit of its Renesas stake for a couple of years, but funding would be timely as bidders compete over a unit that Toshiba values at ¥2T (about $18B).

INCJ has just ¥1T for acquisitions and investment, and so is cautious about making large-scale deals.