Deals
Foxconn May Be Overpaying for Sharp Even With $890 Million Cut
- Company valued at premium compared with electronics peers
- Deal terms may still change while Sharp seeks turnaround
Sharp headquarters in Osaka.
Photographer: The Asahi Shimbun via Getty ImagesThis article is for subscribers only.
Foxconn Technology Group Chairman Terry Gou pushed the negotiations for Sharp Corp. near the breaking point as he slashed about 100 billion yen ($890 million) off the price worked out just a month ago. Even so, he may still be paying a premium for the money-losing electronics maker.
Under terms of the deal announced Wednesday, the parent of Hon Hai Precision Industry Co. is spending 389 billion yen for common and preferred shares, giving it a stake in Sharp of at least 66 percent. It’s paying 88 yen per share for common stock, a 35 percent discount to the closing price yesterday.