The government sold 21 percent of the total shares on offer on the fifth and final day of an auction of a stake in Chunghwa Telecom Co (
The government said it sold 103.9 million Chunghwa Telecom shares at an average price of NT$49.75 a share, raising NT$5.17 billion (US$149 million).
It earlier set a floor price of NT$49, NT$1 lower than the minimum NT$50 it accepted on the auction's first four days.
Dropping the floor price enabled the government to sell more shares today than in the first four days combined. Still, local investors bought only a third of the total 500 million shares on offer.
``Normally companies will offer a discount to lure investors, but government officials just haven't learned that,'' Eric Yang, who manages NT$4 billion in technology shares at Invesco Taiwan Ltd (
``Taiwan's plans to privatize Chunghwa Telecom will be very difficult unless they change their practice,'' he said.
The latest sale of shares in the phone company follows five fizzled auctions to institutional investors and two dud sales to individual investors in the past three years. The sale of a 13.5 percent stake to Cathay Life Insurance Co (
Chunghwa has been a tough sell because of competition in the world's densest mobile-phone market and a global slump in the industry. The government, which once said it would sell a third of the company by the end of 2000, is still stuck with about 80 percent.
The highest bid today was at the stock's NT$50.50 closing price, the government said. A total of 165.8 million shares were sold over the five days, equal to about a 1.7 percent stake in the company. The 500 million shares on offer represented a stake of about 5.2 percent, based on the company's 9.6 billion shares outstanding.
The government first sold Chunghwa shares at NT$104.00 a share in its 2000 initial public offering. The stock plunged 28 percent that year and another 34 percent the following year.
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