Toshiba Corp. told its creditor banks it will be difficult to pick its joint venture partner Western Digital Corp. as the buyer of its chip business, after the two firms held talks the previous day, sources close to the matter said Thursday.

In a meeting with major banks including Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. in Tokyo Thursday, Toshiba revealed that all bidders have offered 2 trillion yen ($17.9 billion) or more for the chip subsidiary as the Japanese conglomerate aims to raise cash to fund its turnaround steps, the sources said.

Western Digital Chief Executive Officer Steve Milligan and Toshiba President Satoshi Tsunakawa met in Tokyo after the U.S. joint venture partner in the chip business in Yokkaichi in central Japan reportedly offered to buy the operation for 2 trillion yen.

While Toshiba is reluctant to accept Western Digital's proposal, it told the banks the two companies will continue talks to find common ground, according to the sources.

Toshiba also told them it is inclined to choose a U.S.-Japan consortium including the state-backed turnaround fund Innovation Network Corp. of Japan and the state-owned Development Bank of Japan as the buyer of the chip unit Toshiba Memory Corp., the sources said.

Discussions were also held over the issue of using Toshiba Memory shares as collateral for fresh loans from the banks, a measure Toshiba has been unable to carry out due to Western Digital's opposition.

Earlier this month, Western Digital took legal action against Toshiba's plan to sell a majority stake in Toshiba Memory, asking the International Court of Arbitration of the Paris-based International Chamber of Commerce to block the sale. The U.S. firm has also demanded an exclusive negotiation.

Toshiba, which is reeling from its worst ever financial crisis, has been in the process of trying to sell a majority stake in Toshiba Memory in the hope of raising at least 2 trillion yen to make up for huge losses in its nuclear business and eliminate negative net worth by next March to avoid getting delisted from the Tokyo stock market.

Toshiba holds a 50.1 percent stake in the joint venture operation and Western Digital is a 49.9 percent owner. Last month, Toshiba spun off its chip business into the newly established Toshiba Memory, which also took over Toshiba's joint venture interest. Western Digital has slammed the procedure, claiming that the transfer and the subsequent selling process breaches their joint venture contract.