Sharp leaning towards Japan's Innovation over Foxconn in takeover bids - report

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Weighing takeover bids from both Taiwan's Foxconn and Innovation Network Corp. — a fund backed by the Japanese government — Sharp management is currently leaning in the second direction, a report said on Thursday.

Executives are leaning towards Innovation despite it offering a lower bid, sources noted to Bloomberg. The publication added that shareholders don't appear to be expressing any concerns, and that the company's bank partners are supportive.

Although the sources didn't say why Innovation has support, the latter's interest may reflect a government's desire to preserve jobs and Japanese industry. Electronics are important to the country's economy and the alternative might be foreign corporations, like Foxconn and Samsung, pushing Japan farther to the sidelines.

Innovation would most likely fold Sharp's display business into Japan Display, which itself was created from units spun off of Sony, Toshiba, and Hitachi.

Whichever route Sharp goes, the resulting entity will have Apple has a major client. Japan Display is an existing supplier, while Foxconn is the company's major manufacturing partner.