The logo of Toshiba Corp is seen at the company's facility in Kawasaki, south of Tokyo, Japan February 28, 2017.

Hitoshi Yamada | NurPhoto | Getty Images

The logo of Toshiba Corp is seen at the company’s facility in Kawasaki, south of Tokyo, Japan February 28, 2017.

Troubled Japanese conglomerate Toshiba has selected a group comprising Bain Capital and South Korea chipmaker SK Hynix to buy its prized memory business, according to Reuters, citing sources.

The move came after Toshiba and Western Digital failed at the last minute to agree on limits to the latter’s future stake in the chip business, Reuters reported.

Representatives for Toshiba and SK Hynix declined to comment on the report.

Toshiba shares jumped 2.86 percent to 324 yen following the news, but closed flat. Meanwhile, SK Hynix shares were up 1.64 percent.

Earlier, Reuters reported that Toshiba was shifting back toward selling the business to a group backed by joint venture partner Western Digital. Reuters added that Western Digital had made key concessions to assure the Japanese firm that it would not seek future control of the chip business.

Last week, Toshiba said it had entered into a non-binding memorandum of understanding with Bain Capital Private Equity to negotiate a “mutually satisfactory definitive agreement” for the sale of the chip business by the end of the month.

Toshiba said it had been negotiating with three potential groups to sell its memory business. One consortium included Bain Capital, the Innovation Network Corporation of Japan and the Development Bank of Japan. Another included Western Digital and a third involved iPhone assembler Hon Hai Precision Industry.

During negotiations, Toshiba said Bain had come forward with a new proposal and that its board of directors “determined to continue negotiations with the Bain-led consortium on the basis of this new proposal.”

Reuters reported that under the new proposal, Bain had partnered with SK Hynix and brought in U.S. tech firms such as Apple and Dell, who are both buyers of Toshiba chips, to bolster the offer that is reportedly worth some $22 billion.

Analysts have previously said the sale of the memory business could be key to turning around the broader business.

The agreement, Reuters said, is expected to be announced later on Wednesday.

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