Embattled Japanese electronics company Sharp has said it has given the green light to a multi-billion-dollar bailout from the parent firm of Taiwan's Foxconn. But the latter put the deal on hold in a surprise move.
Taiwan's Foxconn Technology announced Thursday it was putting on hold its offer to take over Japan's Sharp, just hours after the consumer electronics maker said it would accept the multi-billion-dollar deal.
DPA news agency quoted Foxconn as saying it had received new key information from Sharp, requiring it to clarify some parts of the documents in question.
"The signing of the contract is suspended until a consensus is reached," Foxconn said in a statement.
Under the original deal, the parent company of Foxconn, Hon Hai Precision, was to buy a 65.9-percent majority stake in Sharp worth 489 billion yen ($4.34 billion, 3.94 billion euros).
The agreement would have marked the first foreign takeover of a major Japanese electronics firm, beating out a rival offer from a Japanese investment fund, the Innovation Network Corporation of Japan.
Sharp has teetered on the edge of bankruptcy for years, piling up huge annual losses and struggling through a restructuring plan that has yet to pull it out of the red.
The century-old company, which supplies smartphone and tablet screens to Apple after starting out as a maker of belt buckles and pencils, was once among Japan's leading firms and its brand was internationally recognized.
Good recovery prospects
Analysts suggested Thursday a takeover deal would keep Sharp intact, while it would have been broken up under the rival bid from the Japanese investment fund.
Despite its bleeding balance sheet, Sharp is still a major market player in producing liquid crystal display technology, a key asset for Hon Hai Precision.
"Sharp is strong in research and development, while Hon Hai knows how to market products to customers and it also has expertise in production," Ritsumeikan Asia Pacific university tech professor Yukihiko Nakata summed up the development, indicating that for him the transaction would make perfect sense.
hg/bea (AFP, dpa)