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Sharp is still trying to turn around its business despite a $1.7
billion (£1.1 billion) rescue in May, its second major bailout
in three years.
Sharp and its main lenders are now considering multiple
proposals from Hon Hai, also known as Foxconn, including
financing for its display operations and an investment in the
overall business, the source said.
Bank of Tokyo-Mitsubishi UFJ, the core unit of Mitsubishi UFJ
Financial Group Inc and Mizuho Bank, the core unit of Mizuho
Financial Group Inc are Sharp's main creditors.
Hon Hai and Sharp have been weighing a possible tie-up for
months, sources familiar with the situation have said. But
Japanese state-backed fund Innovation Network Corp of Japan (INCJ)
is widely seen as a more likely investor.
INCJ is the biggest shareholder in Sharp's domestic rival Japan
Display Inc, and sources have said it has an eye on brokering a
merger or partnership between the two companies.
A Hon Hai official was not immediately available for comment,
while Sharp said it was in talks with several parties.
"We are at the stage of negotiating with several companies
regarding various options of fundamental structural reforms of
LCD panel business, however, nothing is decided at this point of
time," a spokesman told Reuters by e-mail.
Tie-up talks between Hon Hai and Sharp fell through in 2012
after the Japanese company baulked at demands that it said would
have given the Taiwanese firm too much control. The two
corporations remained in contact and jointly operate a plant in
Osaka, western Japan, that makes large LCD panels.
(Reporting by Reiji Murai and Ritsuko Ando; Editing by Edmund
Klamann and Susan Thomas)
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