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Samsung sells off Sharp shares after losing bid to Hon Hai Technology Group (Foxconn)
Once the fifth largest stakeholder in Sharp and a potential buyer of the Japanese electronics company, Samsung has ditched all 35.8 million of its shares after Hon Hai Technology Group (Foxconn)’s won the bid to buy Sharp, according to Nikkei Asian Review.
Earlier this year, it was reported that Samsung has submitted a bid to rival Hon Hai Technology Group (Foxconn)’s offer to buy Sharp. Samsung had held about a 0.7 percent stake in Sharp by the time Hon Hai Technology Group (Foxconn) acquired the company for $3.5 billion last month — Samsung once held a 3 percent stake in Sharp.
Samsung’s cashed shares were worth about $45 million, based on Sharp’s closing price of 128 yen per share (about USD$1.25) before the end of trading on Wednesday, according to Nikkei.
Even though it was outbid on Sharp and despite Hon Hai Technology Group (Foxconn)’s deep ties with Apple, almost always serving as the manufacturer of iPhone, Samsung is expected to maintain existing working relationships. Currently, Samsung buys LCD panels produced through a Sharp-Hon Hai Technology Group (Foxconn) venture — it’s their biggest customer.
The unloading of the Sharp shares won’t make a dent in recovering from the massive dip in market valuation Samsung is going through as it fights through the Galaxy Note 7 crisis. Earlier this week, Samsung’s value fell by about $22 billion in the space of two days as word spread about the Note 7’s potential to explode.
Early estimates placed a $1 billion price tag on replacing the dangerous handsets and recouping brand equity. But a Korea investment firm recently stated its belief that they figure should be much higher, somewhere around the $6.7 billion mark.
However, the investment firm noted that Samsung’s chip and display business could cover a good deal of the loss.