Updated: Wed, 06 Mar 2013 00:58:07 GMT | By Agence France-Presse

Shares in Sharp up 17% on Samsung tie-up reports

Shares in struggling Japanese electronics maker Sharp jumped 17 percent on Wednesday after media reports of a $108-million tie-up with South Korean giant Samsung.


Shares in Sharp up 17% on Samsung tie-up reports

Shares in Sharp up 17% on Samsung tie-up reports

Shares in Sharp opened up 17.06 percent at 350 yen on the Tokyo Stock Exchange before easing slightly to 344 yen.

The Nikkei business daily and other media reported Wednesday that Samsung was set to make a capital injection in a deal that would give the South Korean firm greater access to smartphone and tablet computer screens.

Sharp would sell Samsung new shares worth around 10 billion yen ($108 million) for a three-percent stake and use the funds to bolster its bottom line, the reports said.

The investment would make the South Korean group Sharp's fifth largest shareholder overall and the largest non-financial stakeholder.

An official announcement was expected on Wednesday, the Nikkei said.

Sharp would not confirm the reports.

Sharp has suffered from stiff competition in the market for liquid crystal screens that has pushed prices lower, and if the deal goes ahead would provide such products made at its plant in central Japan to Samsung as a priority.

The plant currently ships many of its screens to Samsung's arch rival Apple, and the agreement should allow the South Korean company to avoid huge investment in new production capacity.

According to the Nikkei, the two companies could also explore cooperation in other areas.

Sharp expects to close its fiscal year with a net loss of 450 billion yen, and has been searching for industrial and financial partners.

In March 2012, it signed an accord with the Taiwanese group Hon Hai, also known by its commercial name of Foxconn, that would see the latter acquire a 9.9 percent stake in Sharp for 550 yen per share.

However, the deal faltered and was reported last month to have been suspended before coming to fruition.

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