Foxconn Technology Group is delaying finalization of its deal for Sharp Corp. to get a clear understanding of the Japanese company's performance in the current quarter, increasing the chances an agreement won't be reached this month, according to sources.
Foxconn, which agreed to pay more than ¥600 billion ($5.3 billion) for control of Sharp, has asked the Osaka-based company and its auditor for the latest financial results, said the sources, who wouldn't be identified because the matter is private. Sharp had forecast an operating profit of ¥10 billion for the fiscal year that ends this month, though analysts estimated the company will have an operating loss of about ¥24 billion.
Sharp's board last month voted to accept Foxconn's offer over a competing bid from Innovation Network Corp. of Japan, a government-backed investment fund that planned to pay about ¥300 billion. Just hours after the board decision, Foxconn said it would postpone finalizing the agreement until it could work through material new information it had received from Sharp. That information included about ¥300 billion in potential liabilities for restructuring and layoffs, other sources said.