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Sharp Denies Report It May Sell Some of its Businesses

Sharp Corp. (6753), the money-losing Japanese television manufacturer negotiating to sell a 9.9 percent stake to Foxconn Technology Group, denied a Nikkei newspaper report it may sell some of its businesses.

“The Nikkei report regarding the sale of some operations isn’t factual,” the Osaka-based company said in statement to the Tokyo Stock Exchange today. “We’re considering various options for a recovery,” the liquid crystal display maker said in a separate statement.

Sharp may take tens of billions of yen in bridge loans to redeem commercial paper due this month and is also considering selling businesses from office-equipment to electronic components and divesting its stakes in Olympus Corp. and in a lithium-ion battery venture, the Nikkei reported, without saying where it got the information. Foxconn, maker of Apple Inc. (AAPL)’s iPads, said Aug. 3 it plans to renegotiate the price of its planned investment in Sharp.

Selling the businesses or display factory may leave the electronics maker with too few sources of profit, Makoto Sengoku, a Tokyo-based market analyst at Tokai Tokyo Securities Co., said today by phone. “We can’t see Sharp’s next profit driver if the company unloads all the businesses, so it’s hard for investors to buy Sharp shares.”

Sharp fell 1.7 percent to 172 yen as of 1:30 p.m. on the Tokyo Stock Exchange, compared with a 0.8 percent gain on the benchmark Nikkei 225 Stock Average.

Job Cuts

The television maker plans to cut 5,000 jobs after widening its annual loss forecast eightfold to 250 billion yen ($3.1 billion) this fiscal year because of slumping demand for its televisions, the company said on Aug. 2.

Sharp may also stop producing televisions in Japan, according to the Nikkei report.

“Building TVs in Japan make no business sense,” President Takashi Okuda said Aug. 2. “We will shrink production of existing TVs, but we’ll continue if output of next-generation TVs fits in.”

Foxconn and its Chairman Terry Gou agreed in March to buy 9.9 percent of the Osaka-based company for 67 billion yen, or 550 yen per share, about triple the today’s market price.

The LCD television maker, which supplies companies including Apple with displays, may also spin off the Kameyama, Japan factory where it makes panels used in smartphones, according to the Nikkei report.

Kyocera Corp. (6971), Daiwa House Industry Co. (1925) and Daikin Industries Ltd. (6367) may be among the interested buyers, according to the Nikkei report.

Sharp would need to raise between 300 billion yen and 400 billion yen to prepare for redemption of commercial papers and convertible bonds next year, Goldman Sachs Group Inc. said earlier this week.

The company had 362.5 billion yen in commercial paper, compared with cash and savings of 217.7 billion yen, as of June 30, according to its earnings statement released Aug. 2.

To contact the reporter on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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