Wistron, Compal shares climb on buyout report

Shares of Wistron Corp (緯創), Taiwan's top-tier notebook maker, and Compal Communications Inc (華寶通訊), the nation's largest cellphone maker, rose to near the daily limit yesterday, boosted by a report that a foreign equity fund considered them buyout targets.

Compal's stock closed up 6.3 percent to NT$110.50 (US$3.4) on the Taiwan Stock Exchange yesterday, while Wistron gained 6.9 percent to NT$46.5. The benchmark TAIEX fell 0.3 percent.

Wistron and Compal are the most likely buyout targets of GS Capital Partners V, a private equity fund led by Goldman Sachs Group Inc, the Chinese-language Commercial Times said yesterday.

Both Wistron and Compal denied the report.

GS Capital Partners aims to buy a Taiwanese electronics manufacturer for up to US$2 billion, and other possible targets include keypad maker Ichia Technology Inc (毅嘉科技) and Merry Electronics Co (美律實業), a radio transceiver microphone maker, the report said.

The buyout speculation came after Washington-based Carlyle Group said on Nov. 24 it was considering spending more than US$5.4 billion to take over Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), the world's largest chip packaging and testing company.

ASE denied allegations that the buyout was aimed at moving the company out of Taiwan to avoid legal restrictions on investing in China.

Wistron reported record highs in sales and monthly shipments last month.

It posted NT$21.9 billion in sales last month, up 14 percent month on month and 8 percent from last year, with notebook shipment hitting 1.03 million units.

The company's fourth quarter shipments should hit 2.7 million units, a growth of 4 percent from the third quarter, Macquarie Research Equities said in a report on Dec. 6.

The report said Wistron's momentum would slow from this month through the first quarter next year as the firm enters the industry's low season and as one mainstream notebook from Dell Inc is phased out.

First quarter sales should decline by about 15 percent quarter on quarter to around NT$50 billion on smaller notebook and XBox 360 console shipments, Macquarie said.

Meanwhile, Compal Communications, whose major client is Motorola Inc, posted sales of NT$5.7 billion last month, down 2.7 percent from October because of lower selling prices.

It has cut its shipment forecast for this year from 75 million to 68 million units, citing unfavorable market changes.