OSAKA – Taiwanese authorities have urged Hon Hai Precision Industry Co. to provide details on its plans to tie up with Sharp Corp. and sent its application for approval back to the company, a Taiwanese official said Thursday.
There is concern that Hon Hai shareholders could sustain losses if Sharp’s stock keeps falling. The authorities want Hon Hai to provide detailed explanations about the returns it expects from the investment, the official said.
Hon Hai, better known internationally under its trading name Foxconn, supplies crucial parts to Apple Inc. and other electronics makers.
Hon Hai agreed with Sharp in March to acquire a 9.9 percent stake in the Osaka-based firm by paying ¥550 per share, but that price is likely to be lowered, given the latest developments in Taiwan.
“We will cooperate in providing information so (Hon Hai) can obtain approval soon,” a Sharp official said.
According to Taiwanese media, the authorities have urged Hon Hai to provide more information about the deal with Sharp, saying its explanation about the expected returns does not suffice. Hon Hai said it will study the request and submit the application again.
According to sources, Sharp is expected to agree to Hon Hai’s demand to revise the share acquisition price. The two are making arrangements to issue a joint statement soon stating they will maintain their capital and business alliance plan.
On the Tokyo Stock Exchange, Sharp stock rose 9.4 percent to ¥209 on Friday, but remains substantially lower than when the tieup was announced.
Sony to up So-net stake
Sony Corp. said Thursday it will raise its stake in its Internet provider So-net Entertainment Corp. through a tender offer to turn it into a wholly owned subsidiary and strengthen its network service business.
Sony plans to obtain the common shares of So-net for ¥567,500 each from Friday through Sept. 20. Sony, together with a subsidiary, owned roughly 58 percent of So-net shares as of Thursday.
Afterward, Sony will look to make use of So-net’s ability to develop clientele and knowhow for operating services and infrastructure to develop synergies with its electronics and digital content operations.
So-net’s shares are expected to be delisted from the Tokyo Stock Exchange.
Toshiba turbine deal
Toshiba Corp. said Thursday it has landed an order from Burns & McDonnell Engineering Co. for a high-efficiency steam turbine to replace an obsolete one at a thermal power plant in Iowa.
The new 800,000-kw turbine provides a 14 percent output improvement over the steam turbine installed at the Ottumwa plant, the company said. Installation will begin in September 2014 and be finished by the end of the year, it said.
Toshiba said it expects to cash in on growing U.S. demand for generators and turbines stemming from the construction of new power plants and the retrofitting of existing plants caused by stiffer Environmental Protection Agency guidelines on emissions.