Sharp receives £3.7 billion bail-out offer from Taiwanese firm

Distressed Japanese electronics maker Sharp Corp., has received an acquisition offer from Foxconn for about ¥625 billion (£3.7 billion), according to inside sources as reported in the Wall Street Journal.

Sharp, which has experienced continued net losses in the past years and has been bailed out repeatedly by banks, will review this offer versus government-backed investment fund Innovation Network Corp. of Japan.

Given Sharp’s display technology, Japanese officials have expressed concern about letting Sharp come under foreign control.

Industry minister Motoo Hayashi said this week that "Japan’s technology is leading the rest of the world and we would like to help make it even more competitive."

INCJ, which owns a controlling stake in Japan Display Inc., shares know-how in next-generation panel technology and mass production. In addition, acquisition by the INCJ would keep Sharp under Japanese control. However, Foxconn is offering a greater amount compared the INCJ’s reported ¥300 billion estimated bid.

Sharp reportedly owes between ¥500 billion and ¥600 billion to its creditors, and on top of that, the company faces a March due date for repaying a total of ¥510 billion in borrowings, according to Standard & Poor’s.

The conditions of the offers brings Sharp’s creditors, banking units of Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc., to make a decision based on the economics of the deal, rather than political considerations, one person familiar with the matter said.