SHARP Corp. and Foxconn agreed Friday to extend a deadline for takeover talks by 1-2 weeks, a person familiar with the matter said, after the Taiwanese firm had put the deal on hold to clarify “new material information.”

    Sharp, a loss-making Japanese display maker, announced Thursday it had decided to sell a two-thirds stake to Foxconn, in a deal worth some US$5.8 billion.

    But Foxconn, the world’s largest contract maker of electronic goods and a major supplier to Apple Inc., paused signing off on the deal after receiving new information from Sharp.

    Shares in Sharp slid 11 percent Friday after sources said the delay was over previously undisclosed liabilities of around 300 billion yen (US$2.7 billion).

    In a brief statement late Friday, Foxconn said: “Most of the contents of the material information Foxconn received Wednesday morning, before Sharp’s board meeting began Thursday, had not been previously proposed nor offered during negotiations between the two sides.”

    It added that both sides were consulting on the matter “with the aim of reaching a comprehensive understanding and resolution of the situation. We hope to reach a satisfactory agreement as soon as possible.”

    The late hitch has thrown into doubt Foxconn’s quest to gain Sharp’s advanced screen technology and strengthen its hand with major client Apple. A deal would also signal the opening up of Japan’s insular tech sector to foreign investment.

    At 300 billion yen, Sharp’s contingent liabilities would be almost double its 160 billion yen capital, and some way above the liabilities of less than 100 billion yen that Foxconn’s due diligence revealed, one of the sources said.

    Sharp said in a statement earlier Friday that it has been disclosing its contingent liabilities properly.

    Jefferies analyst Atul Goyal said the entire deal was in jeopardy. “This is especially so given the dramatic back and forth that happened between Sharp and Foxconn in 2012, when Foxconn agreed to acquire a stake in Sharp but then later walked away,” he wrote in a note to clients.

    (SD-Agencies)