Dow Jones Newswires: Sharp Corp. shares fall sharply on plan to acquire display affiliate
Sharp Corp. shares fell as much as 11% on Monday morning following its announcement of a plan to fully acquire a loss-making display affiliate.
The Japanese unit of Foxconn Technology Group
said Friday after the market close that it plans to negotiate with the current owner of Sakai Display Products Corp. to acquire all shares it doesn’t already own.
said Sakai Display’s 2021 earnings results aren’t available yet, but the affiliate posted net losses in the previous three years.
Mitsushige Akino, director in charge of investment management at Ichiyoshi Asset Management, said there is uncertainty over the terms of a potential deal and investors aren’t persuaded of the merit of the acquisition.
Sharp said Sakai Display’s products are likely competitive in the Americas amid U.S.-China trade tensions.
Sharp shares were recently 10% lower at 1,180 yen ($10.26) after falling to as low as Y1,164 earlier.
Sharp said that Samoa-based World Praise Ltd. owned an 80% stake in Sakai Display and Sharp held the remaining 20% stake. Sharp founded Sakai Display in 2009 but later sold down its stake.
Sharp also announced on Friday that Executive Managing Officer Po-Hsuan Wu would become chief executive on April 1.
Earlier this month, Sharp posted a 72% rise in net profit from a year earlier to Y70.84 billion ($615.8 million) for the nine-month period ended Dec. 31.