Hon Hai Precision Industry Co., the assembler of Apple Inc. iPads, may seek to renegotiate a planned ¥133 billion alliance with Sharp Corp. after the Japanese TV maker's shares fell to their lowest in 34 years.
Hon Hai agreed to buy 9.9 percent of Sharp, Japan's largest maker of liquid-crystal displays, for ¥550 a share. Sharp shares have plunged 30 percent below that to ¥386, meaning if the deal closed Monday at the agreed price, Hon Hai would have a paper loss of $255 million, equal to 51 percent of the Taipei-based manufacturer's net income last quarter.
"With the current stock price, Hon Hai won't be willing to pay that much, and given Hon Hai has more say in this alliance than Sharp, the Taiwanese company may request a review," said Takashi Watanabe, an analyst at Goldman Sachs Group Inc.