TAIPEI/TOKYO • Foxconn Group chairman Terry Gou took a step forward in the hotly contested battle for control of Japan's Sharp Corp, winning an agreement to become the preferred negotiating partner for a bailout of the struggling consumer electronics maker.
Mr Gou spoke outside Sharp's headquarters in Osaka yesterday after a meeting that stretched hours past its planned completion.
He held up a paper with his own signature and that of Sharp chief executive officer Kozo Takahashi, and said he expects to have a final agreement by the end of this month.
"We are 90 per cent there, the remaining 10 per cent are legal matters and are not a big deal," he told reporters, speaking in Mandarin with a Japanese translator. "There will be no break-up of Sharp. I guarantee that the Sharp brand will go on."
Mr Gou made the last-minute trip to Japan to step up pressure on the company to quickly accept his proposed bid, after Mr Takahashi said on Thursday that he planned to take another month to choose between Foxconn and the rival bidder, government-backed Innovation Network Corp of Japan (INCJ).
The stock gained 10 per cent to 176 yen (S$2) at the close in Tokyo trading yesterday, after climbing 17 per cent on Thursday.
We are 90 per cent there, the remaining 10 per cent are legal matters and are not a big deal. There will be no break-up of Sharp. I guarantee that the Sharp brand will go on.
MR TERRY GOU, chairman of Foxconn Group
Mr Takahashi had told reporters on Thursday that neither of the potential partners was preferred over the other at that point, contradicting several media reports. "Both parties are on the same footing," Mr Takahashi had said.
A Sharp spokesman declined to comment after Mr Gou's remarks.
Sharp had been inclined to take the bid from government-backed INCJ, which offered about 300 billion yen, people familiar with the matter said last month. But then Mr Gou raised his bid from 600 billion yen to about 660 billion yen (S$7.5 billion) and flew to Japan to make a personal appeal to Sharp's board, its banks and government officials.
The battle has drawn attention as a test case of Japan's willingness to open its economy, following Prime Minister Shinzo Abe's appeal for market reforms and overseas investments to boost growth.
Foxconn, known formally as Hon Hai Precision Industry Co, had offered to invest in the struggling Japanese electronics maker. A takeover by Foxconn, which assembles various electronic products such as smartphones and television sets for Apple, Sony Corp and many other major international companies, would vastly expand sales channels for Sharp's liquid crystal display (LCD) panels.
While a generous Foxconn offer had been flagged, many investors in Japan were surprised to see an overseas firm gain the upper hand over a state fund.
Struggling companies like Sharp - which has now lost money for five straight quarters - have long been able to rely on the country's government and banks for support.
Four years ago, INCJ created Japan Display Inc from the struggling screen units of Toshiba, Sony and Hitachi with a 200 billion yen infusion.
Sharp reported a net loss of 24.7 billion yen in the three months to Dec 31 on Thursday.