Toshiba shares fell Thursday as it faced a court battle over the $18 billion sale of its prized memory chip business, a deal seen as crucial to the Japanese industrial conglomerate's survival.

The embattled stock fell as much as 5.39 percent in morning trade before ending the day at 310 yen, down 1.58 percent.

Toshiba announced late Wednesday the sale to a group led by US investor Bain Capital and which includes US tech giants Apple and Dell as well as South Korean chipmaker SK Hynix.

The sale caps a months-long saga that saw heated courtroom battles, rival bids and the near-delisting of Toshiba, one of Japan's best-known firms.

On Thursday, the Tokyo-based conglomerate said it will hold a special shareholder meeting on October 24 to get approval for the deal. 

But Toshiba's US chip factory partner, Western Digital, vowed to keep trying to block the sale in court. It was a rival bidder for the lucrative unit.

"The deal was within expectations so there aren't many market-moving factors left, but there is still uncertainty about a court battle with Western Digital," said Hideyuki Suzuki, head of investment information at SBI Securities.

Western Digital called the deal "unfortunate" and said it would be "forced to initiate" further legal action.

It added that it has filed a follow-up request to the London-based International Court of Arbitration over the sale.

SK Hynix, which was part of the winning group, added that there still some wrinkles to iron out.

"Some of the key issues in the content approved by the Toshiba board need to be agreed upon, so we will continue negotiations," the South Korean firm said in statement.

Toshiba is the world's number-two chipmaker behind Samsung and the division's products are found in many smartphones and electronic gadgets. 

The chip unit accounts for around a quarter of Toshiba's total annual revenue and is the crown jewel in a vast range of businesses ranging from home appliances to nuclear reactors.

Selling the chip division is seen as key to its survival as it battles to recover from multi-billion-dollar losses at its US nuclear operation Westinghouse Electric.

The shares are down about 30 percent from late December when Toshiba revealed the eye-watering losses at Westinghouse.