Tokyo shares up, Sharp tumbles after Foxconn bailout


TOKYO: Tokyo shares closed higher on Thursday, boosted by a rebound in oil prices, but Sharp dived as the electronics giant accepted a multi-billion-dollar bailout from the parent company of Taiwan’s Foxconn.
The deal, beating out a rival offer from a Japanese investment fund, will see Hon Hai Precision buy a 65.9 percent majority stake in Sharp worth 489 billion yen ($4.34 billion), it said.
Sharp’s volatile stock gyrated wildly on the reports before trading was suspended pending the announcement.
When trading resumed, it went into a nosedive on fears the deal would dilute much of the value of current investors’ shares. Sharp tumbled 14.36 percent to 149 yen by the close.
“Sharp shareholders face a large dilution, but at least the stock isn’t worth zero,” said Atul Goyal, an analyst at Jefferies Group.
At the close, Tokyo’s benchmark Nikkei 225 index gained 1.41 percent, or 224.55 points, to  16,140.34, its first positive session in three days.
The broader Topix index of all first-section shares was up 1.79 percent, or 23.01 points, at 1,307.54.
Sentiment got a boost from gains on Wall Street, where US stocks pushed higher as crude prices rebounded from a slump of more than four percent in the previous session.
“You need to see some settling in the oil price and maybe we’re getting there on that one,” Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney, told Bloomberg News.
“That could be ticked off as a positive but we still need to see more evidence that central banks are doing what they can to stabilise the situation.”