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Hon Hai says working on Sharp statement for later this month

Hon Hai says working on Sharp statement for later this month

By Reuters | Updated: 10 August 2012 15:29 IST

Taiwan's Hon Hai Precision Industry said a planned joint statement with struggling Japanese TV maker Sharp Corp about a renegotiated tie-up plan will be delayed until later this month, partly to accommodate Japan's summer 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. Since then, Sharp shares have tumbled to around 190 yen, and the Taiwanese firm has been keen to renegotiate the terms of the March deal.

The two companies are working to reach a consensus on "a better version" of the March agreement on Hon Hai's investment in Sharp, Hon Hai spokesman Simon Hsing told Reuters on Friday. He declined to give details of any announcement.

Hsing had said earlier this week that 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.

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.

But Sharp spokeswoman Miyuki Nakayama reiterated on Friday that Sharp still considers the March agreement to be in place.

"We haven't said anything about releasing anything," she said on Friday when asked about a possible joint statement.

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 re-submit its application once a joint statement is released, "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, driving sharply higher in the late Friday 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.

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