Fox Conn Lowers Offer On Sharp Due To Future Financial Risks

By Staff Reporter - 21 Mar '16 11:53AM

Fox Conn has confirmed that they will lower its offer to buy Japanese Sharp Corp.

The Taiwanese company, formerly known as Hon Hai Precision Industry, now said that they will buy Sharp for 100 billion yen ($898 million) rather than the original 489 billion yen it offered.

According to Fortune, the news came after a discovery of undisclosed liabilities and potential financial risks. These liabilities are rumored to be 300 billion yen for layoffs and restructuring, Bloomberg states.

The deal was set to be finalized with Sharp offering $4.4 billion of new shares, a two-thirds stake to Fox Conn.

Last week, Fox Conn said that they will stall the deal while they look into Sharps' current quarter review. The Taiwanese tech company is also communicating with Sharp's main banks, Mizuho Financial Group Inc. and Mitsubishi UFJ Financial Group Inc., about reducing interest rates for credit lines and loans due at the end of March, according to Bloomberg.

Reuters reports that Sharp plans to hold a board meeting by the end of the month to discuss on the new deal.

The deal between Fox Conn started last year after the Japanese company was losing money for years.