Sharp Corp. shares climbed in Tokyo after the sale of a stake to Foxconn Technology Group, also known as Hon Hai Precision Industry Co., was completed, ending a four-month wait for the cash-strapped maker of flat panel televisions.
The shares jumped 10 percent to ?117 in Tokyo on Monday, after rising 31.5 percent over the past two days for their biggest two-day gain ever.
The Osaka-based firm also received a ?300 billion commitment line from its lenders.
Sharp agreed to a rescue from Foxconn, choosing the Taiwanese firm over a rival bid from the state-backed Innovation Network Corp. of Japan in a takeover battle that spanned four years. President Kozo Takahashi stepped down, to be replaced by Foxconn¡¯s Tai Jeng Wu. Sharp¡¯s liabilities no longer exceed assets after the ?289 billion infusion, it said.
¡°With the risk of insolvency removed, the shares have a strong upward momentum,¡± said Hideki Yasuda, an analyst at Ace Research Institute in Tokyo. ¡°How far they climb will depend on how Foxconn will choose to restructure Sharp. It¡¯s not enough to optimize and cut costs, there needs to be a credible strategy for future growth.¡±
While Foxconn and Sharp agreed to the deal in April, it was not until last week that antitrust authorities in China cleared the acquisition.
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