Taiwan Seeks More Information on Hon Hai-Sharp Deal

Taiwan Seeks More Information on Hon Hai-Sharp Deal

After Sharp's share price nosedive, the island's Investment Commission returned the Taiwanese firm's application citing price concerns.

Taiwan said Thursday it had asked technology firm Hon Hai (IW 1000/53)  for more information about its plan to buy a stake in struggling Japanese electronics giant Sharp (IW 1000/120), citing concerns the price is too high.

The island's Investment Commission said it had last week returned the Taiwanese firm's application pending further information after Sharp's shares nosedived, but insisted the tie-up had not been rejected.

Hon Hai, parent company of manufacturer Foxconn which builds gadgets for Apple (IW 500/9), agreed in March to take a 10% stake in Sharp for about 550 yen ($7) per share.

But the share price has since dropped to below 200 yen after Sharp announced last week that it lost $1.77 billion in April-June and warned of a bigger full-year shortfall than first expected.

"We are concerned about the interests of Hon Hai's shareholders, as it's rather unusual to see such dramatic changes in the price of a share in such a short period," said Emile Chang, a spokesman of the Investment Commission.

Chang said the commission sent the application back to Hon Hai on Friday last week.

On the same day, Hon Hai announced a plan to renegotiate the terms for the share purchase.

Hon Hai spokesman Simon Hsing told AFP Hon Hai's decision was not triggered by the Investment Commission's request for a revised application.

He said Hon Hai will resubmit the application once it has agreed with Sharp on new terms.

Copyright Agence France-Presse, 2012

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