Accton Technology Corp (智邦科技), a local telecom equipment manufacturer, said yesterday it had received a NT$1 billion (US$30.9 million) offer from private equity firm Hong Jeng Investment (宏瞻財務顧問) to purchase 10 percent of its shares on the open market.
Hong Jeng Investment plans to purchase 54.46 million common shares of Accton at NT$20 per share over a 10-day period ending on Nov. 16, Accton said.
The offer represents a 22 percent premium to Accton's closing price of NT$16.35 on the Taiwan Stock Exchange on Tuesday.
Hong Jeng chairman Stephen Tsui (崔湧) had also expressed an interest in buying out 100 percent of Accton shares for US$335 million during a visit to the company on Tuesday, Accton spokesman Frank Kuo (郭飛龍) told a press briefing.
"Basically, we welcome the offer, but we are not quite satisfied with the price ... We believe this deal will benefit Accton as our competitiveness will improve after integrating our resources under the fund," Kuo said.
Kuo quoted Tsui as saying that if Hong Jeng succeeded in its plan to fully acquire Accton's stock, it would delist the firm from the local stock market and relist it in 2009.
Accton is scheduled to hold a board meeting next week to discuss the offer from Hong Jeng, he said.
Accton's major shareholders include Kinpo Group (
Hong Jeng, which has NT$20 million in funds, said in a press release that it does not rule out buying more than 50 percent of Accton shares at a proper time.
The company plans to introduce strategic partners to expand the fund size to complete the transaction.
"I don't think Accton is a good buy-out target for any private equity firm, if we look at its track record," said Lu Chia-lin (
Private equity fund managers usually buy cash-rich firms or companies that offer high growth potential thanks to their leading industry position, Lu said.
Accton has neither, he said, adding that it had lagged its local peers in developing next-generation high-speed WiMAX equipment.
Accton saw narrower losses of NT$44.37 million in the first three quarters of this year, compared with losses of NT$181 million a year ago. Revenues slid about 11 percent year-on-year to NT$9.97 billion.
Hong Jeng Investment is a subsidiary of FAT Capital Management Co (
In September, FAT Capital completed an NT$8.6 billion acquisition of Primax through another fund unit, Hong Chuan Investment (鴻傳投資).