The chairman of Taiwan’s Foxconn Technology Group took a step forward in the hotly contested battle for control of Japan’s Sharp Corp., saying his company has become the preferred negotiating partner for a bailout of the struggling consumer electronics maker.
Terry Gou, chairman of the giant electronics products company, spoke outside Sharp headquarters in Osaka after a meeting that stretched to nine hours. He held up a paper with his signature and that of Sharp Chief Executive Officer Kozo Takahashi, and said he expects to have a final agreement by the end of February. He wore a red sweater and gold scarf, celebratory colors in China.
“We are 90 percent there, the remaining 10 percent are legal matters and are not a big deal,” he told reporters, smiling and speaking in Chinese with a Japanese translator. “There will be no breakup of Sharp. I guarantee that the Sharp brand will go on.”
After Gou’s comments, Sharp issued a statement saying it had not announced Foxconn was a preferred partner, contradicting his characterization of the agreement.
Local Angle
A change in ownership for Sharp shouldn’t impact subsidiaries in Clark County, according to local leadership.
“Negotiations for an investor interest in Sharp Corporation are ongoing,” said John Marck, president of Camas-based Sharp Microelectronics of the Americas, in a statement Friday afternoon. “No decision has been made as of this moment in selection of either the Innovation Network Corporation of Japan or Hon Hai Precision Industry Co. Ltd. (Foxconn) as a potential investor. It is anticipated that a decision will be made in about 30 days. At this point, there is no intent to change Sharp’s campus in Camas, where Sharp Microelectronics of the Americas and Sharp Laboratories of America are located.”
The last employment numbers released showed about 130 people work at Sharp Laboratories, a research and development facility, and more than 100 people work at Sharp Microelectronics, which markets and sells electronics. The two companies share a building on their Camas campus in the Prune Hill area.
— Brooks Johnson
Gou made the last-minute trip to Japan to step up pressure on the company to quickly accept his proposed bid, after Takahashi said Thursday he planned to take another month to choose between Foxconn and the rival bidder, government-backed Innovation Network Corp. of Japan.
The stock gained 10 percent at the close in Tokyo trading, after climbing 17 percent Thursday.
A victory for Foxconn would mark a shift for Japan, where struggling companies have long been protected and supported financially by the government and banks. INCJ helped bail out domestic companies in semiconductors and displays in the past, injecting capital to help management restructure operations.
“It’s a bellwether transaction,” said Nicholas Benes, representative director of the Board Director Training Institute of Japan, which specializes in directorship and governance training. “Finally the government has decided it just won’t do to prefer your own deal over another, particularly when you are spending taxpayers’ money.”
Takahashi told reporters Thursday that neither of the potential partners is preferred over the other at that point, contradicting several media reports.
“Both parties are on the same footing,” Takahashi said that day.
Raising bid
Gou has pushed hard for a deal even as it looked unlikely he would win. Sharp had been inclined to take the bid from INCJ, which offered about 300 billion yen, people familiar with the matter said last month. But then Gou raised his bid from 600 billion yen to about 660 billion yen ($5.6 billion) and flew to Japan to make a personal appeal to Sharp’s board, its banks and government officials, a person familiar with the matter has said.
As recently as Jan. 31, Gou said he was confident of winning the bid and had no need to go back to Osaka this week, leaving the deal to his staff to work out. His return on Friday was unscheduled, with Foxconn holding annual weeklong internal meetings with executives who flew in from around the world.
He repeatedly praised Sharp at the press gathering in Osaka. He said Foxconn’s capital would allow the company to invest and return to leadership in LCDs.
“Sharp’s young engineers are truly remarkable. There is so much to learn,” he said. “Sharp’s LCD technology was once cutting edge, but ran out of stamina for investments.”
