Epistar (晶電), the nation’s top light-emitting-diode (LED) chipmaker, said yesterday it would purchase shares of smaller rival Tekcore Co (泰谷光電) through a private placement deal.
In its filing to the Taiwan Stock Exchange, Hsinchu-based Epistar said it planned to invest NT$722.4 million (US$22.45 million) to acquire a 19.9 percent stake in Tekcore, which is located in the Nangang Industrial Zone (南崗工業區) in Nantou County.
The aim of the purchase was to “share resources together while lowering potential risks for capacity expansion in a bid to enhance profitability and boost shareholders’ interests,” Epistar said in the filing.
The deal came after Tekcore’s board passed a proposal on Sept. 18 to raise NT$1.08 billion by selling 60 million common shares via private placement.
The two firms’ planned alliance comes at a time when the industry is continuing to experience a LED chip shortage, which is likely to continue through next year, against the trend of increasing adoption of LED as backlight in TV sets, Daiwa Securities SMBC-Cathay Co (大和國泰) said.
Epistar chairman Lee Biing-jye (李秉傑) said last month the chip shortage would last until 2012.
With the 19.9 percent stake, Epistar will become Tekcore’s biggest shareholder, followed by LED chip packager Everlight Electronics Co (億光電子) which bought a 15.9 percent share in Tekcore in June.
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