Tokyo - Foxconn Technology Group Chairman Terry Gou is stepping up pressure on Sharp to quickly accept his proposed bailout of the Japanese consumer electronics company, a day after Sharp’s chief executive officer said he planned to take another month to choose between two competing offers.
Gou met at Sharp headquarters in Osaka with management Friday, aiming to complete a deal within days. He asked for the session Thursday after Sharp CEO Kozo Takahashi told reporters he planned to keep negotiating for a month with both Foxconn and rival bidder Innovation Network Corp. of Japan, according to a person familiar with the matter who asked not to be identified because the matter is private. Gou had said he would speak to reporters at 3 p.m. local time, but hadn’t appeared in front of the gathered media two hours later.
Takahashi told reporters Thursday that neither of the potential partners is preferred over the other at this point, contradicting several media reports. He was questioned repeatedly about whether one bidder was favoured over the other and refused to concede the point.
“Both parties are on the same footing," Takahashi said.
Litmus test
The battle has drawn attention as a test case of Japan’s willingness to open its economy, following Prime Minister Shinzo Abe’s appeal for market reforms and overseas investments to boost growth. Struggling companies like Sharp - which has now lost money for five straight quarters - have long been able to rely on the country’s government and banks for support.
The stock gained 10 percent to close at 176 yen in Tokyo trading, after climbing 17 percent yesterday.
Toyodo Uemura, a spokesman for Sharp, declined to comment. Foxconn didn’t respond to an e-mail seeking comment.
Read also: Sharp skyrockets on bailout offers
Higher offer
Gou has pushed hard for a deal even as it looked unlikely he would win. Sharp had been inclined to take the bid from government-backed 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 January 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 week-long internal meetings with executives who flew in from around the world.
Takahashi said Thursday that the offer amount wasn’t the only consideration and that losing propriety technology to a foreign company wasn’t a factor in weighing the Foxconn deal. He also said Sharp is “devoting more resources” to evaluating the Foxconn plan.
“Both options have a good chance of turning Sharp around, but it’s very difficult to compare the two at this point,” Toshihiro Uomoto, the chief credit strategist in Tokyo at Nomura Holdings Inc., said. “Foxconn’s acquisition is likely to come with all kinds of conditions. INCJ’s deal will also entail some restructuring.”
Japan’s government has a long history of providing support to domestic companies to keep technology out of the hands of foreign rivals. Four years ago, INCJ created Japan Display Inc. from the struggling screen units of Toshiba, Sony and Hitachi with a 200 billion yen infusion.
Sharp also reported its fifth straight loss Thursday as it released financial results. The Osaka-based company had a net loss of 24.7 billion yen in the three months to December 31.
-With assistance from Shingo Kawamoto.
BLOOMBERG