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Sharp, Hon Hai chiefs to extend deadline

Kyodo, JIJI

The leaders of Sharp Corp. and Hon Hai Precision Industry Co. have agreed to extend the deadline for the Taiwanese firm’s takeover deal beyond Monday, sources familiar with the matter say.

Following Friday’s meeting between Sharp President Kozo Takahashi and Hon Hai Chairman Terry Gou in Shenzhen, after the Taiwanese firm on Thursday announced a delay in signing its rescue offer, the deadline is expected to be extended by around one to two weeks, the sources said.

On Thursday, Sharp’s board decided to accept Hon Hai’s takeover bid. But hours later the company better known by its trade name Foxconn said it needed to clarify the content of a document disclosed at the last minute by Sharp reportedly listing about ¥350 billion of contingent liabilities.

Contingent liabilities are potential liabilities that may become financial obligations depending on uncertain factors such as lawsuit results and accounting changes.

Sharp, which has been hurt by stiff foreign competition in liquid crystal displays, said in a statement that it is in talks with Hon Hai about reaching a definitive agreement “by confirming our managerial status, including Sharp’s contingent risks.”

Hon Hai on Friday released a statement saying most of that content had not been provided during the negotiations.

In a responding statement, Sharp said: “Sharp’s contingent liabilities have already been appropriately disclosed in our securities report and quarterly report based on accounting rules,” adding that no further disclosure is necessary.

The deal would be the first acquisition of a major Japanese electronics maker by a foreign company. Hon Hai is offering ¥660 billion ($5.9 billion) to gain control of Sharp.