The China Post – February 22, 1016 – Electronics giant Sharp Corp. is scheduled to hold a board meeting on Thursday to choose between bailout proposals tendered by Hon Hai Precision Industry Co. (鴻海) and a Japanese government fund, according to Japanese media.
As Sharp aims to finalize its takeover decision, the board convened a meeting over the weekend to review Hon Hai’s proposal.
Ranking officers of Sharp paid a visit to Hon Hai’s headquarters in Taiwan last week. Officials from the two sides reportedly reached a broad consensus and even inked a draft contract.
Following the results of the meeting in Taiwan, the Sharp board held two separate meetings on Feb. 20 to review plans proposed by Hon Hai and Innovation Network Corp. of Japan (INCJ).
Hon Hai’s plan reportedly receives wider board support. However, the management still has doubts over the Taiwanese company’s pledge to keep Sharp employees on the payroll. Hon Hai’s plan for Sharp’s solar energy business in the future is also a concern.
Sharp board members have a regular meeting scheduled for Wednesday, Feb. 24, but a more important meeting will be convened the following day, Feb. 25, to decide the company’s fate.
Terry Gou (郭台銘), chairman of Hon Hai, said earlier that negotiations have entered their final stage. Having put his best efforts into the proposal and having demonstrated his sincerity toward the deal, Gou said he now hopes for the best outcome.
Gou, after making a trip to Japan last week, expressed his confidence in securing Sharp’s favor. Hon Hai’s plan presents better terms in many aspects like job retention, future order potential and product development, the chairman said.
Hopefully, a joint declaration on the cooperation between the two companies will be made by the end of February, he added.
Hon Hai plans to invest 700 billion Japanese yen into taking effective control of Sharp and reconstructing its business without selling off any key segments, including its high-end liquid crystal display business.
INCJ’s proposal still has some backers among Sharp’s executives. If it gains the ultimate green light, Sharp will resume full negotiations with the fund until a deadline at the end of March. Hon Hai was given preferred negotiating rights for its proposal earlier on.
According to the Japan Times, the negotiations with INCJ are expected to be difficult because it calls for fresh financial aid from Sharp’s frustrated creditors – Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ.