Bain Capital, formerly the largest shareholder of Japanese semiconductor company Kioxia, has sold most of its stake, making SK hynix (000660.KS) effectively Kioxia's second-largest shareholder. Some observers predict that SK hynix could eventually emerge as the top shareholder, as Toshiba, which has become the largest shareholder, is also continuing to sell its stake.
According to the Nikkei newspaper on the 26th, Bain Capital sold most of its Kioxia stake and generated proceeds of approximately 2.5 trillion yen (about 22 trillion won), as disclosed through large shareholding reports and other filings last month. Bain Capital acquired a 55% stake in Toshiba Memory (now Kioxia) through four special purpose companies (SPCs) in 2018.
With Bain Capital's stake sale, Toshiba, which holds a 15% stake in Kioxia, has for now become the largest shareholder. The second-largest shareholder is the SPC in which SK hynix is the effective investor, currently holding a 14% stake. However, since SK hynix has not yet converted its convertible bonds (CBs) into shares, it must pass antitrust reviews in various countries to become a shareholder with actual voting rights.
Following Bain Capital, Toshiba is also continuing to sell its Kioxia stake. At the time of Kioxia's initial public offering (IPO), Toshiba's shareholding stood at about 40%, but it accelerated its stake sales beginning this spring, reducing the holding to 18.5% in March and recently to 15.1%.
Since Toshiba has stated that it will continue to sell its Kioxia stake to use for shareholder returns, some analysts suggest that SK hynix could eventually become Kioxia's largest shareholder. However, as approval must be obtained under the competition and antitrust laws of various countries, attention is focused on what decision SK will make. SK has stated that it will not hold more than 15% of Kioxia's voting rights until 2028.
In addition, since SK hynix and Kioxia are direct competitors in the NAND flash market, both Kioxia and the Japanese government are known to view the matter sensitively. In its report last month, Kioxia noted that "because of the competitive relationship, there is a possibility that SK hynix's exercise of voting rights may differ from the interests of general shareholders." SK hynix ranks second in the NAND market after Samsung Electronics, with a market share of about 20%.
In a recent report, Kioxia also mentioned that "although SK hynix has not currently converted its bonds into shares, it may have already begun the necessary procedures under the antitrust laws, foreign exchange laws, and foreign trade laws of various countries."
