Sharp shares jump after Intel investment report
Shares in Japan's Sharp jumped on Friday on a report the embattled electronics maker may get a cash injection of more than $380 million from US chip giant Intel. The Japanese firm surged 8.42 percent to 219 yen at one point in the morning before easing back slightly to end the morning session up 5.13 percent at 213 yen on the Tokyo Stock Exchange, despite official denials from the company. The Mainichi Shimbun reported that Sharp was in talks with Intel over a possible capital tie-up in which the US side could invest more than 30 billion yen ($383 million). The two companies hope to reach an agreement possibly by the end of October, the daily said without naming its sources. Intel is keen on making use of Sharp's technology to produce small and medium-sized liquid crystal display panels while Sharp could get much needed cash through a tie-up, the paper said. "The report isn't true," company spokeswoman Miyuki Nakayama said, adding the comment should be taken as a "complete denial". The Mainichi said Sharp would continue negations with its Taiwanese partner Hon Hai while the talks with chip rival Intel continue. Sharp announced in March a tie-up deal with Hon Hai Precision, parent company of manufacturing giant Foxconn which builds gadgets for Apple. Under the initial deal Sharp was to sell 121 million new shares worth 66.9 billion yen to Hon Hai, with each share priced at 550 yen. Hon Hai would own a 9.9 percent stake in Sharp after the sale, making it the Japanese firm's biggest shareholder. But the deal has hit a snag, with Sharp shares recently diving on concerns over the firms' finances. Sharp incurred its largest ever net loss of 376 billion yen in the business year ended in March as global prices of LCD panels and televisions fell. It expects another loss of 250 billion yen in the current year. Company president Takashi Okuda last week vowed to restore profitability, saying the Osaka-based firm would book a net profit in the fiscal year starting in April 2013.
