Hon Hai's Terry Gou confident in Sharp takeover bid

Hon Hai's Terry Gou confident in Sharp takeover bid

TAIPEI, Taiwan -- Hon Hai Precision Industry chairman Terry Gou expressed confidence Sunday that his offer to buy out Japan-based Sharp is better than competing bids.

Gou reportedly visited Osaka and made a personal appeal to the embattled electronics maker's management the previous day.

"What I'm offering is not only capital, but also the entrepreneurial spirit and a sharing culture among employees. The board of Sharp considers these (notions) as refreshing," Gou said in a company event Sunday.

Hon Hai intends to keep Japan's management and will ensure workers' right to employment.

"We don't want to shatter this company and hope it will stay for another 100 years," the business tycoon said, adding that "working with us will be a right choice."

Gou's statement was the most elaborate explanation regarding the takeover since Hon Hai announced its intention. The Hon Hai chairman would not disclose the bid's dollar amount, saying that a confidentiality agreement is still in effect.

The bid offer ranges of about 660 billion yen (S$7.7 billion), and the plan includes a 400 billion yen growth fund, according to an inside source.

Hon Hai's archrival in the takeover is Innovation Network Corp. of Japan (INCJ), a fund backed by Japan's government. INCJ stands ready to put down 300 billion yen, according to people familiar with the matter.

INCJ's ranking officers also allegedly paid a visit to Sharp's headquarters in Osaka to present its proposal on Saturday.

Asked if Hon Hai's bid will emerge victorious in the end, Gou said "Yes, I'm very confident. I believe our offer conditions are much better than our rivals'."

Sharp will announce its decision on the matter on Feb. 4 at the earliest when it publishes financial statements.

New Government Advised to Vitalize Capital Market

The Hon Hai group believes the government plays a pivotal role in fostering a business friendly environment in Taiwan.

As president-elect Tsai Ing-wen prepares to be sworn into office in May, Gou Tai-chiang, son of Terry Gou and chairman of Foxlink Group, said Sunday he hopes the new government can revitalise the capital market.

One of the major issues is undervalued share prices, which has led to talent and technology outflow. The new government has to deal with this problem, Gou said in a company event Sunday.

Also, hopefully the new government will break the impasse of current cross-strait trade agreement talks, Gou added.

Although Foxlink Group experienced revenue growth in 2015, the company met many challenges rising from mainland China, such as growing wage levels and competition from local supply chains, Gou said.

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