“Sharp Corp’s list of liabilities that prompted Taiwan’s Foxconn to suspend signing a takeover deal was an unverified study of worst-case scenario risks, rather than liabilities requiring disclosure, a source briefed on the matter said,” Makiko Yamazaki and Taro Fuse report for Reuters.
“The list, sent to Foxconn on Wednesday, included previously undisclosed potential liabilities worth around 300 billion yen ($2.6 billion), prompting Foxconn founder and billionaire Terry Gou to hold off signing the estimated $5.8 billion deal, separate sources have said,” Yamazaki and Fuse report. “Reuters was unable to ascertain why the list was sent to Foxconn, formally known as Hon Hai Precision Industry Co. Top Sharp officials had not examined the list and had not planned to share it with Foxconn, the source told Reuters on Saturday, declining to be identified because of the sensitivity of the matter. The items included unlikely events or risks, and the amount was far higher than contingent liabilities that require disclosure, the source added, without elaborating.”
“Foxconn agreed with Sharp late on Friday to extend a deadline for the takeover talks by one or two weeks beyond Monday’s planned expiry, another source said,” Yamazaki and Fuse report. “In a statement on Monday, Sharp said it had no set deadline for sealing a deal. It added that it aimed for a deal ‘as soon as possible.'”
Read more in the full article here.
MacDailyNews Take: Sounds like a miscommunication – unless someone intended to gum up the works. This would be the largest acquisition by a foreign company in Japan’s insular technology sector, as the report notes.
SEE ALSO:
Why Foxconn’s multi-billion-dollar deal for Sharp is dead in the water – February 25, 2016
Foxconn’s $5.1 billion bid for Sharp could be good for Apple, too – February 25, 2016
Apple supplier Sharp accepts Hon Hai’s $6.2 billion takeover offer; Hon Hai says deal on hold – February 25, 2016
Foxconn fast-tracks $5.5 billion Sharp takeover bid – February 4, 2016
State-backed Japanese fund in race with Foxconn to save Sharp – January 21, 2016
Hon Hai considering $1.7 billion stake in Sharp LCD business; to ask Apple to invest a ‘few hundred million’ – September 28, 2015
Hon Hai offers to buy Sharp’s LCD business, wants Apple funds – September 21, 2015
Apple suppliers Sharp, Foxconn in talks for LCD joint venture – August 24, 2015
Beleaguered Sharp’s problems present an opportunity for mighty Apple – May 15, 2015
Apple display supplier Sharp warns on ability to stay afloat after $1.9 billion loss – May 14, 2015
Apple iPhone display supplier Sharp boosts operating profit – August 1, 2014
Sharp dedicates entire LCD plant to Apple – June 30, 2014
Hon Hai in no hurry to finalize Sharp deal – June 26, 2013
Sharp to replace chairman, president after losses – May 14, 2013
I can imagine a great deal of cultural shame involved with a Japanese company being bought out by a Chinese company. I wonder if this list of liabilities is deliberate poison.