There were a couple of stories circulating the end of the year, which are sure to keep the rumor mill grinding as we begin 2016.
The first one reported that Sharp shares rose by 8 percent as the result of reports that the Taiwan company, Hon Hai Precisions industry was willing to pay ¥300B ($2.45B) for the company on the condition that Sharp top management (in Japan) be revamped. According to a Wall Street Journal story, Hon Hai is primarily interested in Sharp’s display technology, leaving some industry observers to speculate that should this deal go through Hon Hai might then turn around and sell off the assets of Sharp assets that it’s not interested in. I’ll leave it to you to speculate what those assets may be. Incidentally, this wouldn’t be the first time Hon Hai has been mentioned in the same breath as Sharp. In 2012, the company attempted to take a 10 percent stake in Sharp, but decided against it after Sharp’s share price declined.
The Wall Street Journal doesn’t consider this a smart move on Hon Hai’s part, writing, “…a bid for all of Sharp would be going too far. It would involve having to turn around Sharp’s struggling solar panel and household appliance businesses. Moreover, it would also mean taking on Sharp’s ¥564 billion of net debt, more than twice its current market capitalization. Hon Hai could just be positioning itself for the coming battle over Sharp’s display business. But if it does take over Sharp, Hon Hai would be biting off more than it could chew.”
I’d be remiss not to mention another story related to Sharp that’s popped up this week and that is welcome news if true to those of us who cover Sharp, and that’s that Sharp’s copier division is not for sale.
The other news comes to us courtesy of the Photizo Group’s Ken Stewart who last week published an article titled, “Is This the Death of Lexmark? Firm Rumored to Sell to Konica Minolta.”
Stewart reports that Photizo received an unsolicited letter postmarked December 23, 2015 stating that “Paul Rooke, Jeri Isbell, the executive officers of Lexmark, and the Board of Directors are preparing to sell Lexmark to Konica Minolta.” The letter was signed by the Lexmark Employees for Ethical Conduct (LEEC).
The letter received by Photizo outlines details of the pending acquisition:
- Lexmark will announce its “largest and most significant” product launch in the company’s history on January 28, 2016;
- This launch will position the firm to terminate many of its R&D staff;
- Konica Minolta is most interested in acquiring hardware product line to complete gaps in its own product offering;
- Konica Minolta has no desire to take ownership of Enterprise Software; and
- Konica Minolta is likely to streamline its operations (and headcount) in the coming 3-5 years.
Those bullet points were presented in Stewart’s article. Additionally, Stewart observed, “While it is no surprise to us that Konica Minolta would be the ideal suitor, it is surprising that the firm would not be interested in the Lexmark’s Enterprise Software division, which we count equally interesting as the intellectual capital the company has garnered in imaging hardware and managed services over the years. In fact, we question whether Konica Minolta, vying for its own dominance in tomorrow’s evolving landscape, would be so shortsighted.” Read the full Photizo article here.
Oddly enough in my trends, trendsetters, and predictions for 2016 article in the January issue of ENX, I observed that the status quo would remain for both Sharp and Lexmark in 2016 although I may have erred on the side of optimism. I just wasn’t expecting to be proven wrong so soon if indeed these rumors turn out to be true.
Finally, don’t forget to register for the Year in Review Webinar presented by Actionable Intelligence. It was without a doubt one of Actionable Intelligence’s greatest hits when they recapped 2014 a year ago.
Thanks for reading.
