Wed, Jun 27, 2012 - Page 13 News List

No new sales to Hon Hai: Sharp

ENOUGH FOR NOW:Hon Hai spokesman Simon Hsin said it was already a major breakthrough that the 100- year-old Japanese company had sold it a stake at all

By Lisa Wang and Kevin Chen  /  Staff reporters

Speculation has been ripe in recent months that Hon Hai Group (鴻海集團) would attempt to renegotiate the terms of an investment in Japan’s Sharp Corp, as the latter’s shares continued to fall.

This speculation was put to rest yesterday when Japan’s biggest LCD maker said that it had no plan to sell more of its shares to the Taiwanese group, or to allow more Hon Hai executives to sit on its board.

Sharp president Takashi Okuda said at the company’s annual general meeting in Osaka, Japan, yesterday that the firm would not accept an increase in share investment from Hon Hai, the Central News Agency reported yesterday.

Okuda’s remark came after Hon Hai Precision Industry Co (鴻海精密) chairman Terry Gou (郭台銘) told reporters in Taipei on June 18 that his company intended to buy more shares from Sharp.

Hon Hai Precision is the flagship unit of the group, which makes Sony TVs, Hewlett-Packard printers and Apple’s iPhones and iPads.

The company, along with its local subsidiary Foxconn Technology Co (鴻準), which oversees investment arms Q-Run Holdings Ltd and Foxconn (Far East) Ltd, announced on March 27 that it would buy a combined sum of 121.65 million new shares, or 9.87 percent, of Sharp at ¥550 per share, for a total of ¥66.91 billion (US$843.4 million).

Sharp said earlier that its capital and business alliance with Hon Hai was aimed at realizing vertical integration at the global level and enhancing competitiveness in the LCD sector.

However, the Japanese company’s share prices have dropped 18.78 percent to close at ¥398 in Tokyo trading yesterday from ¥490 on March 27, down 40.24 percent so far this year.

On Saturday, Hon Hai announced in separate stock exchange filings that the group would book a mark-to-market loss of NT$6.4 billion (US$213.5 million) because of its investment in Sharp, reflecting the plunge in Sharp’s share prices.

In response to Sharp’s rejection, Hon Hai spokesman Simon Hsin (邢治平) said yesterday that “the company does not need to increase its holdings to strengthen their cooperation.”

It was already a major breakthrough for a century-old company like Sharp to sell a stake to a foreign company, he said.

Hsin also said Hon Hai’s longterm and extensive partnership with Sharp remained intact, though the company did not hold any seats on

Sharp’s board after the latest election. Sharp already said in a notice to its shareholders on May 31 that it would not grant any voting rights to Hon Hai at yesterday’s shareholders’ meeting.

“We are working closely together to help the company make a profit again. We reached a consensus to integrate Sharp’s brand advantage with Hon Hai’s strength in cost-saving manufacturing,” Hsin said.

Hon Hai share prices ended down 0.58 percent at NT$86 in Taipei trading, up 3.74 percent since the beginning of the year.

This story has been viewed 2748 times.
TOP top