Foxconn, Sharp extend takeover talks deadline: source

Fri Feb 26, 2016 11:18am EST
 
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By Ritsuko Ando and J.R. Wu

TOKYO/TAIPEI (Reuters) - Sharp Corp (6753.T: Quote) and Foxconn agreed on Friday to extend a deadline for takeover talks by 1-2 weeks, a person familiar with the matter said, after the Taiwanese firm had put the deal on hold to clarify "new material information".

Sharp, a loss-making Japanese display maker, announced on Thursday it had decided to sell a two-thirds stake to Foxconn, in a deal worth an estimated $5.8 billion.

But Foxconn, the world's largest contract maker of electronic goods and a major supplier to Apple Inc (AAPL.O: Quote), paused signing off on the deal after receiving new information from Sharp.

Shares in Sharp slid 11 percent on Friday after sources said the delay was over previously undisclosed liabilities of around 300 billion yen ($2.7 billion).

In a brief statement late on Friday, Foxconn said: "Most of the contents of the material information Foxconn received on Wednesday morning, before Sharp’s board meeting began on Thursday, had not been previously proposed nor offered during negotiations between the two sides."

It added that both sides were consulting on the matter "with the aim of reaching a comprehensive understanding and resolution of the situation. We hope to reach a satisfactory agreement as soon as possible."

Foxconn founder Terry Gou and Sharp CEO Kozo Takahashi met in China, said another person familiar with the matter. Neither company confirmed those talks.

The late hitch has thrown into doubt Foxconn's quest to gain Sharp's advanced screen technology and strengthen its hand with major client Apple. A deal would also signal the opening up of Japan's insular tech sector to foreign investment.   Continued...

 
The logo of Sharp Corp is seen at Tochigi plant in Yaita, north of Tokyo, November 19, 2015. REUTERS/Reiji Murai