Hon Hai Precision Industry Co.'s delay in finalizing a takeover agreement for Sharp Corp. is raising risks that the deal the Taiwanese company has pursued for months will fall apart before it's completed.
It has been 25 days since Sharp's board voted in favor of a bailout proposal from Hon Hai, also known as Foxconn Technology Group, over a competing offer from Innovation Network Corp. of Japan. Hon Hai's bid totaled more than ¥600 billion ($5.4 billion), including ¥489 billion to acquire new shares in Sharp and ¥100 billion to acquire preferred stock from the company's main banks.
Since that time, Hon Hai Chairman Terry Gou has held off in signing a final agreement with Sharp as his advisers examine the company's finances. Hon Hai has sought to reduce the amount it is supposed to pay Sharp's banks and wants more clarity on Sharp's performance in the current quarter, people familiar with the matter have said.
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