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UPDATE 2-Hon Hai says remains committed to buy Sharp stake
March 26, 2013 / 8:30 AM / 5 years ago

UPDATE 2-Hon Hai says remains committed to buy Sharp stake

TOKYO, March 26 (Reuters) - Talks on an alliance between Sharp Corp and Hon Hai Precision Industry will continue even though a deadline for a deal between the two lapsed on Tuesday.

Hon Hai said it remained committed to buy a 9.9 percent stake in Sharp, that would make the Taiwanese company the largest shareholder in the Japanese TV maker.

“Hon Hai hopes that with the support of a consortium of financial institutions, we can conclude the investment within three months of the price agreement,” the company said in a statement.

Hon Hai also said both sides had agreed to work towards an agreement after talks on Sunday.

A Sharp spokeswoman said talks on business alliances were still ongoing, but declined to comment on the 9.9 percent stake or the three-month time-frame.

Sharp, bailed out by a group of banks last year, had said earlier that the deadline for Hon Hai to buy a stake had lapsed without any deal.

Talks with Hon Hai had stalled after Sharp balked at its demand for a degree of management control. Hon Hai also sought to lower a $708 million price tag after Sharp’s shares slumped in the wake of losses that prompted a bank rescue last year.

The banks, which include Mizuho Financial Group Inc and Mitsubishi UFJ Financial Group Inc had not been expecting a revised deal with Hon Hai, sources told Reuters last month.

Sharp has concluded smaller investment deals with Samsung Electronics Co Ltd and Qualcomm Inc..

Sharp already has links with Hon Hai through their joint ownership of the world’s most advanced LCD plant in Sakai, western Japan. The two companies are also cooperating in smartphones in the Chinese market.

Sharp’s shares fell 1.7 percent to close at 290 yen in Tokyo on Tuesday, before Sharp’s announcement that the deadline for the deal with Hon Hai had lapsed.

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