Quanta clinches share deal

Quanta Computer Inc (廣達電腦), the world's biggest notebook computer maker by volume, yesterday sold US$141 million worth of shares overseas, according to Morgan Stanley & Co, who arranged the deal.

The company sold 12 million shares in the form of global depositary receipts (GDRs) at an offering price of NT$80 (US$11.755) per share to finance the company's purchases of parts and components, according to a document from Morgan Stanley.

Investors believe the purpose of the deal is to help finance the company's flat-panel display unit, Quanta Display Inc (廣輝電子).

"The company [Quanta] is pleased that the deal generated so much demand and achieved a zero-discount GDR issuance, which is unusual in Taiwan," Morgan Stanley executive director Crawford Jamieson said in a conference call yesterday morning from New York.

Quanta had previously expected the GDR issuance to be closed at a discount of less than 3 percent, according to local media reports.

If the company had decided to sell an additional 15 percent or 1.8 million shares in the form of GDRs, or the so-called "green shoes," depending on investor demand, the GDR deal would have amounted to US$162 million in total, Jamieson said.

The company's existing shareholders, especially its chairman, Barry Lam (林百里), however, were very disappointed with the offering price of NT$80, which was the shares' closing value on Thursday after a five-day decline on the local stock market from their highest close of NT$90, according to Jamieson.

"The company is obviously disappointed about the way the market turned [since] its share price was down 11 percent over the last five-day period," he said.

Because Lam decided not to sell his shares at the last moment, Morgan Stanley had to restructure and downsize the deal to exclude these shares, Jamieson said.

As foreign investors are upbeat about the trend of replacing desktop computers with notebooks, Jamieson said that the deal successfully attracted investors to bank on the company's future prospects.

The demand, nevertheless, was mostly from Asian investors, who amounted to 37 percent of the pool of investors. European investors accounted for 26 percent of the sales and US investors 20 percent, Jamieson said.

Following the deal, Quanta shares yesterday rose NT$1.5, or 1.88 percent, to close at NT$81.5 percent.