Innovation Network Corp. of Japan is making the case to Sharp Corp. that its rescue proposal for the electronics maker is worth more than an offer from Taiwan’s Hon Hai Precision Industry Co., a sign the government fund is determined to keep fighting for victory in the takeover battle.

The state-backed fund proposed a package of cash, asset sales and support from lenders that it says is worth ¥1 trillion, according to documents INCJ presented to Sharp and obtained by Bloomberg News. Hon Hai, also known as Foxconn Technology Group, is offering about ¥660 billion for the company, a person familiar with the matter has said.

INCJ’s proposal included a ¥300 billion cash infusion for Sharp as well as ¥350 billion in support from its lenders, according to the documents. The fund also proposed raising ¥150 billion from its stake in Sakai Display Products Corp. and ¥200 billion in financing.

“Money matters, but what’s important is the company’s long-term viability,” said Yasuaki Kogure, chief investment officer at SBI Asset Management Co. “Beyond the money amounts, the questions that need answering are about Sharp’s restructuring.”

Foxconn Chairman Terry Gou emerged from a nine-hour meeting with Sharp on Friday and said his company has become the preferred bidder, with a final agreement expected by the end of the month. About an hour later, the Osaka-based company contradicted his comments, saying that INCJ’s bid is still in play.

INCJ has not given up on the proposal and is not planning to raise its offer, the fund’s Chief Executive Officer Toshiyuki Shiga said in an interview with the Nikkei Shimbun newspaper on Monday. INCJ’s focus on restructuring rather than revival makes its plan fundamentally different from Foxconn’s, Shiga said in the report.

“There needs to be a board decision to give a preferred negotiating partner status,” Atsushi Yoshida, a spokesman for Sharp, said following Gou’s comment on Friday. “The board meeting yesterday didn’t yield such status and there was no meeting today. We plan to continue our talks with INCJ.”

Toyodo Uemura, a spokesman for Sharp, declined to comment, and negotiations with firm are continuing, a spokesman at INCJ said. Foxconn also declined to comment.

The lender support in INCJ’s proposal would include a ¥110 billion debt-for-equity swap, the documents show. Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. would also cancel ¥225 billion of preferred stock they hold in Sharp, shares Foxconn is offering to buy, according to INCJ’s plan.

INCJ proposed merging Sharp’s liquid crystal display operations with those of Japan Display Inc., where the fund is a major shareholder, according to the documents. The fund’s offer will reflect fair value of Sharp’s stock, preventing possible shareholder lawsuits and also involve bringing in new management, according to the documents.

Gou has pushed hard for a deal even as it looked unlikely he would win. Sharp had been inclined to take the bid from INCJ, people familiar with the matter said last month. But then Gou raised his bid from ¥600 billion to about ¥660 billion and flew to Japan to make a personal appeal to Sharp’s board, its banks and government officials, a person familiar with the matter has said.

Foxconn’s negotiations with Sharp are 90 percent complete, Gou told reporters on Friday outside Sharp headquarters. There will be no breakup of the company, he said, echoing comments from Sharp Chief Executive Officer Kozo Takahashi a day prior.

“The remaining 10 percent are legal matters and are not a big deal,” Gou said.

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