Foxconn’s Sharp Investment Plan Undeterred by Share Plunge
Foxconn Technology Group is determined to buy a stake in Sharp (6753) Corp. even after the Japanese company widened its loss forecast, causing its shares to plunge.
“I still want to invest,” Foxconn founder and chairman Terry Gou said today in Taipei. “If you just want to look at two to three months, then I’m not interested. I’m looking at 10 to 20 years.”
Gou flew to Japan Aug. 3 to discuss the deal and set out terms for Foxconn, the maker of Apple Inc. iPhones and iPads, to buy 9.9 percent stake in the Osaka-based producer of Aquos television sets. Sharp prepared a presentation including plans for better performance, according to a copy Gou showed to reporters today.
Sharp’s shares plunged 28 percent to 192 yen the same day, after the company widened its full-year loss forecast eight-fold to 250 billion yen ($3.2 billion). Foxconn said after the market closed it had agreed with Sharp to negotiate a price lower than the 550 yen per share decided in March. Sharp offered Foxconn the opportunity to renegotiate, Gou said today.
Foxconn, via Hon Hai Precision Industry Co. (2317) and Foxconn Technology Co. (2354), had originally planned to invest 67 billion yen into Sharp, while Gou has put 66 billion yen of his own money into a display venture with the Japanese company.
Foxconn, which also makes computers for Hewlett-Packard Co. (HPQ) and games consoles for Sony Corp., expects to complete the deal by the end of March, meeting a timeline to close the transaction a year after announcing it, Gou said today.
The number of shares and “the money will be the question to ask, but definitely one plus one will equal 3.5,” Gou said today. “At the most appropriate time and most appropriate price we’ll then enter” the company, he said.
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