Foxconn chief Terry Gou walked away from talks with Sharp last month because he wasn't being offered enough control in return for his cash, it has emerged.
It has been apparent for several weeks that the deal between Sharp and Foxconn's parent company Hon Hai was stumbling, and now a comment from Gou explains why.
Sharp wanted Hon Hai to invest some serious money, asking Gou and his colleagues to buy out 9.9 per cent of Sharp's shares to become the company's biggest stakeholder. Sharp was keen to offload its LCD division onto Foxconn as well.
But Gou wanted more say on strategy in return for the cash, Reuters reported. And that wasn't on offer.
Gou didn't even meet the key players in Sharp during a visit to Japan, Reuters reported, and the meetings have yet to be rescheduled.
Sharp is keen to get Hon Hai back to the negotiating table. The firm has posted some seriously bad results this year, has closed several factories, and last week put up nearly all of its domestic real estate assets – including its own headquarters and the factories producing the screens for the new iPhone – as collateral against loans of $3.8bn. But Reuters say that Sharp's bankers are not counting on any Hon Hai money in calculating the refinancing deal. ®