Toshiba shares surge after Greenlight stake, U.S. court hearing

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TOKYO (Reuters) – Toshiba Corp shares jumped on Tuesday after a U.S. hedge fund said it had added a stake and after Western Digital Corp did not gain an immediate injunction to block the $18 billion sale of the Japanese conglomerate’s chip unit.

Toshiba may be worth as much as 400 yen per share once it resolves a legal dispute with Western Digital over the sale of its chip business, the U.S. hedge fund, Greenlight Capital said on Friday.

Toshiba’s shares climbed 6.6 percent in Tuesday morning trade to trade at 246.8 yen. The Tokyo market was closed on Monday for a national holiday.

Western Digital, which is Toshiba’s memory chip joint venture partner, sued Toshiba in a U.S. court in mid-June, arguing that Toshiba needs its consent to sell the business.

At the hearing on Friday, Judge Harold Kahn postponed a decision on whether to grant an injunction and proposed requiring Toshiba to give Western Digital two weeks notice before closing the sale.

Toshiba is scrambling to complete the sale to help cover billions in losses at its now-bankrupt Westinghouse’s nuclear unit.