Sharp Corp. (6753) advanced to its highest in six months in Tokyo trading after the Nikkei newspaper said the company may sell a TV factory to Lenovo Group Ltd. (992) and form a China sales venture with the PC maker.
The Japanese electronics company gained 7.3 percent to close at 338 yen, the stock’s highest since July 11. It tumbled 55 percent last year, the biggest decline among members of the benchmark Nikkei 225 Stock Average.
Sharp is in final talks on selling the Chinese plant and another in Malaysia in separate deals that may raise about 30 billion yen ($339 million), Nikkei reported, without citing anyone. The company has said it’s seeking to raise funds as it heads toward a record annual loss because of slumping TV sales.
Osaka, Japan-based Sharp isn’t the source of the information in the Nikkei report, Miyuki Nakayama, a spokeswoman, said by phone today. Raymond Gorman, a spokesman for Beijing-based Lenovo, declined to comment, saying the PC maker doesn’t “respond to or speculate upon rumors.” The world’s second-biggest maker of personal computers fell 1.2 percent to HK$7.65 at the close in Hong Kong trading.
Lenovo may buy a liquid-crystal-display TV plant in Nanjing from Sharp by year’s end, Nikkei said, without citing anyone. The companies also may form a China sales venture that could expand to Southeast Asia and Latin America, according to the report.
Hsinchu, Taiwan-based Wistron Corp. (3231) is in talks about the possible purchase of the TV plant in Malaysia, Nikkei said. Joyce Chou, a spokeswoman for Wistron, declined to comment. The company rose as much as 6.6 percent in Taipei trading.
Lenovo is interested in expanding through purchases, Chief Executive Officer Yang Yuanqing said in a Jan. 4 interview. The company bought International Business Machines Corp.’s laptop- making unit in 2005.
Acquisitions are “a good tool to drive the growth and building of capability,” Yang said. “We will continue to leverage this tool, if we can find targets.” He didn’t elaborate on possible deals.
Lenovo started selling Android-based “smart” TVs in China in May as it expands beyond its traditional focus on computers. The company, which so far only offers the TVs in its home market, has seen “very small volume” in sales, Yang said in the interview, without supplying details. The company declined as much as 1.9 percent in Hong Kong trading.
Sharp, which turned to Qualcomm Inc. (QCOM:US) last month for as much as 9.9 billion yen ($112 million) in new capital, is selling assets and seeking more ways to boost capital, President Takashi Okuda said earlier this month. The company warned in November about its ability to survive after hemorrhaging 103 billion yen in cash from operations in the fiscal first half due to falling prices of LCD TVs and solar panels.
The company has forecast a record net loss of 450 billion yen for the year ending March 31. The 100-year-old inventor of mechanical pencils is cutting jobs and payroll to revive profit after posting a 376 billion-yen loss last fiscal year.
--Mariko Yasu and Edmond Lococo. With assistance from Tim Culpan in Taipei. Editors: Aaron Clark, Dave McCombs
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