Sharp may sell stake to Foxconn for less

Beleaguered Japanese electronics giant Sharp may reduce the price of its stake to be sold to Taiwanese contract manufacturer Hon Hai, better known as Foxconn, in order to secure the lifeline as its stock plunges.

In a Wall Street Journal report Monday, Sharp spokesperson Heihachiro Ochiai said the company proposed a revision to the share price as the two parties continued their negotiations.

Hon Hai is expected to still buy a 9.9 percent of stake in Sharp as previously agreed in March. At that time, the sale was priced at 550 yen (US$7) per share for a total of US$800 million, and would make Foxconn the biggest shareholder of Sharp.

The latter's share price, however, dropped steadily over the months and by the end of this morning, was a third of the agreed amount at 186 yen (US$2.37), the Wall Street Journal reported.

Last Friday, Standard & Poor's cut its credit rating on Sharp to junk status, it added.

Ochiai said the company's president, Takashi Okuda, was planning to visit Hon Hai in Taiwan but no schedule had been set. Foxconn Chairman Terry Gou's previous visit to Japan last week in an attempt to finalize the deal failed to bear fruit.

Ochiai added both companies had been discussing the stake sale as well as ways to broaden their partnership, including the possibility of selling off Sharp's TV assembly plants in China and Mexico to Hon Hai.

Sharp's proposal to slash the sale price of its stake comes amid various issues affecting its negotiation with Hon Hai. Last month, it announced it was cutting 5,000 jobs as part of restructuring measures, a move which prompted Hon Hai to seek discussions.

Meanwhile, in Taiwan, the Ministry of Economic Affairs returned Hon Hai's application for the Sharp stake, citing insufficient detail regarding the investment efficiency of the deal it deemed as a "little pricey".