The IPO is one of various contingency plans being looked at by Toshiba’s top executives, the FT said, citing people familiar with the plans. It added that some analysts and Toshiba shareholders favor it over the existing deal.

Toshiba agreed last September to sell Toshiba Memory, the world’s second-biggest producer of NAND chips, to a consortium led by Bain to cover billions of dollars in liabilities arising from now bankrupt U.S. nuclear power unit Westinghouse Electric Co LLC.

But the Japanese conglomerate no longer faces the pressure it once did to complete a sale, after raising 600 billion yen ($5.4 billion) with a new share issue to overseas funds late last year, which with tax write-offs gives it sufficient funds to cover its liabilities.

If the deal fails to win regulatory approval by March 31, Toshiba is free to walk away, sources familiar with the situation have told Reuters.

A Toshiba spokeswoman said there had been no change in its efforts to complete the sale of the chip unit. A representative for Bain was not immediately available for comment.

Hong Kong-based activist investor, Argyle Street Management Ltd, a hedge fund with $1.2 billion under management, has voiced opposition to the sale, saying it was no longer necessary and that the board should consider an IPO instead.

Toshiba shares hit a three-month high in morning trade, at one point rising as much as 4.7 percent.