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Sharp falls on Foxconn deal as delay raises risks for completion
[TOKYO] Sharp Corp fell 5 per cent on Tuesday as a final agreement with Foxconn Technology Group continues to elude the Japanese company almost a month after the board backed a bailout offer, raising risks that the deal the will fall apart.
The shares declined to 131 yen as of 9.31 am in Tokyo, the biggest drop in almost a week. Foxconn's bid totaled more than 600 billion yen (S$7.3 billion), including 489 billion yen to acquire new shares in Sharp and 100 billion yen to acquire preferred stock from the company's main banks.
The Taiwanese company is seeking to reduce the amount it will pay, Yomiuri newspaper and Jiji reported.
It has been 26 days since Sharp's board backed the Foxconn's bailout over a competing offer from Innovation Network Corp of Japan.
Since that time, Foxconn chairman Terry Gou has held off in signing a final agreement with Sharp as his advisers examine the company's finances. The Taiwanese company has sought to reduce the amount it is supposed to pay Sharp's banks and wants more clarity on Sharp's performance in the current quarter, people familiar with the matter have said.
Foxconn is also seeking to reduce its payment for new Sharp shares by 10 per cent to 20 per cent from the original 489 billion yen, the Yomiuri newspaper reported. The Taiwanese company is seeking to reduce its offer for Sharp by about 100 billion yen, Jiji news agency reported on Monday without citing its sources.