Foxconn, surprised by Sharp’s skeletons, delays takeover
Japanese display maker Sharp’s corporate board said yes to a $6.24 billion proposal from Taiwan’s Foxconn.
But Foxconn has decided to think over the deal further after Sharp suddenly submitted a list of approximately 100 contingent liabilities that could cost the company about $3.1 billion down the line. Foxconn is still prepared to finalize the takeover, something it has chased after since Sharp began asking for buyers, but stated it would need to digest and sort through the list first.
We will have to postpone any signing of a definitive agreement until we have arrived at a satisfactory understanding and resolution of the situation.
Foxconn CEO Terry Gou was uncharacteristically quiet after Sharp announced its approval of the takeover after heavily promoting and selling the deal to the public and to the board. Sharp did not comment on the new development.
Foxconn tried to invest in Sharp back in 2012, but Sharp’s share price fell while negotiations took place to the point where Gou pulled his company out of a potential deal.
Source: Wall Street Journal