TAIPEI Taiwan's Hon Hai Precision Industry said a planned joint statement about a renegotiated tie-up plan with struggling Japanese TV maker Sharp Corp would likely be delayed until late this month to accommodate Japan's holiday season.
Hon Hai, the world's leading contract electronics manufacturer and a key supplier to Apple Inc, agreed in March to buy around a tenth of Sharp for $844 million, or 550 yen per share, as part of a tie-up in liquid crystal display (LCD) production. Sharp shares have since tumbled to around 190 yen, and Hon Hai has been keen to re-set the terms of the deal.
The two companies are working to reach a consensus on "a better version" of the March agreement, Hon Hai spokesman Simon Hsing told Reuters on Friday. He declined to give details of any announcement. Hsing had previously said a joint statement was expected this week.
"We have a mutual understanding and the joint release is a work in process. I understand that Japan has a summer break starting next week so it'll be a better time after," he said.
Hon Hai chairman and founder Terry Gou has pushed for the Sharp deal to tap the Japanese firm's panel manufacturing expertise. As part of the original agreement, Gou also took a stake in a Sharp LCD plant in Japan, saying the facility's advanced technology was better than rival Samsung Electronics'. For loss-making Sharp - whose bankers are said to be keen to drive a deeper restructuring - the tie-up with Hon Hai would bring cash and help it use idle production capacity.
Last Friday, Hon Hai said Sharp had effectively released it from the terms of the March deal, prompting the talks to renegotiate a deal, with Hon Hai looking to pay less per share or take a bigger stake in Sharp.
Sharp spokeswoman Miyuki Nakayama said on Friday that Sharp still considers the March agreement to be in place, though she conceded that talks with Hon Hai were ongoing - the first indication the Japanese company has given that it is discussing revised terms.
"Sharp and Hon Hai have been negotiating over various issues. We will make an announcement when things have been decided," she said.
Taiwan's government, which vets all outbound investment by Taiwanese firms, on Thursday sought more details from Hon Hai on its planned injection into Sharp, suggesting it may be paying too much. It returned Hon Hai's investment application to the company asking for more detail.
Hsing said Hon Hai would work on re-submitting the application after a joint statement, "because it will be a new situation." He denied market talk that Hon Hai would pursue its investment in Sharp at a new price of 207 yen per share.
"No new agreement has been reached," he said.
In Tokyo, Sharp shares rose 9.4 percent, spiking higher late in the session, to close at 209 yen. It was the stock's biggest one-day jump since late-March when Hon Hai struck its initial 550 yen per share investment deal.
(Reporting by Clare Jim in Taipei and Tim Kelly in Tokyo; Editing by Ian Geoghegan)