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Board to mull Foxconn bid sweetened by deposit

OSAKA -- Sharp's board will meet Wednesday to discuss whether to accept Hon Hai Precision Industry's roughly 700 billion yen ($6.23 billion) takeover offer, whose prospects have been bolstered by an agreement to furnish 100 billion yen upfront.

     Sharp had agreed four years ago to an investment from Hon Hai, also known as Foxconn. But that deal fell through as the Japanese company's share price sank. Sharp, burned by the experience, asked the Taiwanese contract manufacturer this time to pay a deposit if its offer is accepted.

     Sharp confirmed at a Feb. 4 board meeting that it would grant Foxconn preferential negotiating rights. President Kozo Takahashi and Foxconn CEO Terry Gou agreed the following day to aim for a deal within the month. Sharp's board may meet again Thursday if a decision is not reached Wednesday.

     In addition to investment and loans, Foxconn's proposal includes keeping together major businesses other than solar cells. Sharp executives, particularly outside directors, are increasingly warming to the idea, and major lenders take a positive view.

     The Innovation Network Corp. of Japan has offered to invest 300 billion yen in Sharp as well as set up a 200 billion yen credit line to fund growth. This proposal has run into trouble with Sharp lenders, who are being asked to provide up to 350 billion yen in additional support.

(Nikkei)

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