“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.
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