TAIPEI, Aug 9: Taiwan said on Thursday it had returned Hon Hai Precision Industry’s application to invest in Japan’s Sharp Corp last Friday, and requested that Hon Hai provide more details on the proposal.
‘We think Hon Hai has not explained enough about the investment efficiency of the deal, which is related to price…The deal is a little pricey,’ Emile Chang, deputy executive secretary of the Economics Ministry’s investment commission, told.
Hon Hai agreed in March to buy an 11 percent stake in its fellow Apple Inc supplier for $844 million, or 550 yen per share, as part of a tie-up in liquid-crystal display production.
Hon Hai’s executives were not immediately available for comment.
Hon Hai will have to get approval from the commission before it can invest in Sharp, Chang said.
The commission reviews all mergers and acquisitions for those involving foreign companies, regardless of the size and nature of the deal.
KKR-backed $1.6 billion management buyout plan of electronics component firm Yageo fell apart last year after the Investment Commission blocked the deal in June.
Last Friday, Hon Hai said Sharp had agreed Hon Hai does not need to honour an agreement signed in March to invest in Sharp, though Hon Hai will still have the right to buy the agreed stake.
By 0238 GMT, shares of Hon Hai rose 3 percent, versus the broader market’s 0.9 percent rise.
(agencies)
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