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Carlyle Group calls off buyout bid for chip packager ASE

The Carlyle Group has called off its buyout bid for Advanced Semiconductor Engineering (ASE, 日月光半導體), the chip packager said in a filing to the Taiwan Stock Exchange late last night.

Last November, an investment consortium led by Carlyle Group had offered to buy all of the Kaohsiung-based chip packager's 4.6 billion outstanding shares at a price of NT$39 (US$1.2) per share, amounting to a US$5.46 billion bid.

The offer was raised to NT$39.5 per share by Carlyle after ASE organized a taskforce to assess the bid and negotiated with the consortium, the statement said.

However, the taskforce later informed the ASE board and Carlyle that the new offer "did not reflect the value of ASE," the statement read.

Shares of ASE closed up 1.2 percent to NT$41 on the Taiwan Stock Exchange yesterday.

The share price hit a high of NT$41.75 before the close of trading yesterday, representing a 5.7-percent discount to Carlyle's renewed offer.

In February, the Carlyle Group terminated an exclusive deal with ASE chairman Jason Chang (張虔生), who earlier agreed to sell an 18.4-percent stake in ASE owned by himself and his family at NT$39 per share as part of the bid.

Upon learning of Carlyle's decision, the Financial Supervisory Commission said last night that it respected the fact that the deal broke down as a result of a disagreement between the two companies about the offer price.

"The failed deal is expected to have an impact on the capital markets and the commission will keep a close eye on the follow-up effect," commission spokesperson Susan Chang (張秀蓮) said.

While the financial regulator still welcomes acquisitions of local companies by foreign private equity funds, hostile takeovers are unacceptable and the commission will step in to prevent such a move, she added.

Protection of shareholders' rights and interests remains a major factor in the approval of investment applications for local listed companies by overseas private equity firms, the commission said in a statement released late last night.
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