Thu, Nov 30, 2006 - Page 11 News List

No bids received yet for future takeover, Acer says

THREE CONDITIONS Acer is not ruling out a foreign buyout, but the company set some preconditions for a takeover, including that headquarters remain in Taiwan

By Jason Tan  /  STAFF REPORTER

Acer Inc, the world's fourth-largest personal computer maker, yesterday said it had yet to receive bids from foreign equities for a possible takeover.

"We do not rule out buyout possibilities but we haven't been approached by anyone yet," company chairman Wang Jeng-tang (王振堂) told reporters before a product launch yesterday.

Wang said he believes that the management at Acer consists of executives who are the "cream of the crop" and that the team ought to be given a leading role in determining company's strategies -- even if the buyout were to happen.

"Acer has its own unique business models in product design, sales and services. We will be able to gain management control because the purpose of a buyout from private funds is to make profits," he said.

Acer Group founder Stan Shih (施振榮) said that he would welcome an acquisition by private equity funds, the Economic Daily News reported yesterday.

But conditions for such takeover would include: improving Acer's global competitiveness, maintaining its brandname, approval by the management and keeping the headquarters in Taiwan, he said.

"Taiwanese vendors play a critical supporting role in the world's technology landscape and will continue in that role if they could integrate local resources with those from China," he said.

Shares of Acer closed up 2 percent to NT$66 yesterday on the Taiwan Stock Exchange.

Shin's remarks came in the wake of an announcement by Washington-based Carlyle Group on Friday that it would offer US$5.7 billion (US$185.25 billion) to purchase Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), the world's largest chip packager and tester.

The bid has fueled speculation on more buyouts targeted at Taiwanese technology companies.

In addition to ASE, Acer, Quanta Computer Inc (廣達電腦) and Lite-On Technology Corp (光寶科技) were all named by the media as potential targets of Carlyle last week.

Macquarie Research Equities yesterday gave an "outperform" rating for Acer, with a target price of NT$70.

"Acer has a very strong cash flow that private equity appears very interested in. We now do not exclude the possibility that [Carlyle] may approach Acer, but we believe it is too early to judge the results," Macquarie analyst Daniel Chang (張博淇) said in the research note.

Acer is currently performing very well and its fourth-quarter sales should hit 25 percent quarter-on-quarter, exceeding Macquarie's forecast of NT$108 billion

"Next year will be a good year for Acer due to the launch of Intel Corp's Santa Rosa platform ? although we believe Acer may still have its traditional low season in the first quarter," he said.

Acer yesterday announced the debut of a notebook which will cater to fans of New York Yankees pitcher Wang Chien-ming (王建民).

It said that only 20,000 units of the special-edition notebooks will be produced and that these would account for one third of Acer's notebook sales in the upcoming IT Month, which opens on Saturday.

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