Tokyo - Sharp, the embattled maker of Aquos flat-screen televisions, plans to decide between competing bailout offers this week, people with knowledge of the matter said.
The Japanese electronics company will discuss rival bids from state-backed Innovation Network Corp. of Japan and Taiwan’s Foxconn Technology Group at a February 4 board meeting, according to the people. Sharp aims to decide on a preferred partner at the meeting and announce a direction for its restructuring plan shortly afterward, the people said, asking not to be identified as the information is private.
Foxconn Chairman Terry Gou met Sharp’s board at their Osaka headquarters January 30 to make his case for a raised bid of about 660 billion yen ($5.4 billion), a person familiar with the matter has said. Though the Taiwanese company is offering more money, Sharp is leaning toward a deal with INCJ, which plans to invest about 300 billion yen and would keep the company’s technology within Japan, people familiar with the matter said last month.
Discussions on the competing proposals could drag on, and there’s no certainty Sharp will reach a decision this week, one person said Monday.
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“We are in talks with INCJ and Foxconn on the restructuring of our LCD business for our turnaround, but nothing has been decided,” Toyodo Uemura, a spokesman for Sharp, said by phone.
Representatives for Foxconn, INCJ and Sharp’s major lenders, Mitsubishi UFJ Financial Group and Mizuho Financial Group, declined to comment.
Separately, Sharp asked its labor union to extend pay cuts for an additional year amid operating losses. The company, which had asked for reductions in pay last year, requested the measures be extended until March 2017 rather than expire next month. The pay cuts for management have been 5 percent, while those for the union have been 2 percent.
Sharp shares closed unchanged in Tokyo trading Tuesday after having climbed 14 percent this year.
-With assistance from Takashi Amano and Robert Fenner.
BLOOMBERG