Chunghwa Picture Tubes Ltd (
"We are always open to industry consolidation and do not rule out forming a partnership with competitors. But we certainly do not have any specific plans," Chunghwa Picture Tubes said in a filing to the Taiwan Stock Exchange (TSE) yesterday.
A number of Chinese-language newspapers on Saturday cited Chunghwa Picture Tubes chairman Frank Lin (林鎮弘) as saying that he was in talks with Barry Lam (林百里), the chairman of fifth-largest flat-panel maker Quanta Display Inc (廣輝電子), about a possible partnership between the two.
In the reports, Lin was quoted as saying that Chunghwa Picture Tubes would prefer a merger "between equals," and that the two parties might announce a partnership deal this Friday with a share swap ratio of 1 to 1.
The reports, however, prompted Quanta Display to call an emergency press conference on Saturday afternoon, saying that the company was open to partnerships but that nothing was concrete yet.
Quanta Display is a unit of Quanta Computer Inc (廣達), the world's biggest notebook computer maker.
Quanta Computer spokesman Tim Li (
The firm would not limit itself to cooperating with any one flat-panel maker for the moment, he said.
Lin's remarks come as the government encourages consolidation in this fragmented sector in an attempt to compete with rival nations like South Korea. Yet the remarks also raised the eyebrows of the nation's financial regulators.
The Financial Supervisory Commission, which oversees all publicly traded companies in the country, said it had instructed Chunghwa Picture Tubes to provide written comment on the merger speculation by today at the latest.
If the company's filing to the stock exchange does not satisfy the regulator, Chunghwa Picture Tubes executives may have to make a supplementary verbal explanation, commission spokesman Lin Chung-cheng (林忠正) said yesterday.
When asked what the commission might require the company to clarify, Lin Chung-cheng said he could not say any more, although local press reported that the commission was concerned about possible insider trading and whether or not Frank Lin had been given authorization by the company's board of directors to manage any merger.
Listed companies are required to keep confidential ongoing merger and acquisition activities until deals are approved by the boards of directors and shareholders in order to prevent market manipulation.
Chunghwa Picture Tubes shares closed up 4.75 percent at NT$9.70 on Friday, while Quanta Display slid 2.22 percent to NT$11.