Solarcell maker E-Ton Solar Tech Co (益通光能) said yesterday it would sell 230 million shares to Inventec Corp (英業達) founder Yeh Kuo-yi (葉國一) and his laptop-making company for NT$5.06 billion (US$172.6 million) in a private placement deal.
The sale of the shares — priced at NT$22 per share and representing a 47.97 percent stake in E-Ton — came after Hon Hai Precision Industry Co (鴻海精密) unexpectedly announced earlier in the day that it was dropping its share purchase plan with E-Ton because of disagreement over terms.
On Tuesday night, Hon Hai, the nation’s largest electronic manufacturing service provider, had announced it would buy a 36.77 percent stake in the solarcell maker through its subsidiaries for NT$4.04 billion, or NT$20 per share, a move that would have helped Hon Hai enter the green energy market.
“Hon Hai subsidiaries Hyield Venture Capital Co (鴻揚創投), Hon Chi International Investment Co (鴻棋國際投資), Pao Shin International Investment Co (寶鑫國際投資) and Billion Gain International Ltd (利億國際) have decided not to participate in the E-Ton private placement deal because of disagreements that arose during the negotiating process,” Hon Hai spokesman Edmund Ding (丁祈安) said in a filing to the Taiwan Stock Exchange.
The four subsidiaries on Tuesday agreed to purchase 153 million shares in E-Ton for a total of NT$3.06 billion.
Ding later told a media briefing at the stock exchange that Hon Hai had decided to call off the deal because E-Ton had chosen a third party even before they could reach an agreement. He said the deal did not collapse just over pricing, because the two had differences regarding financial transparency.
“Pricing is not usually a key issue in many corporate deals. Sometimes, it’s the company’s execution ability and credibility that matter more,” Ding was quoted as saying by local cable TV network UBN.
Asked if Hon Hai was still interested in investing in solar cell or module makers, Ding said it would continue to seek potential partners, but didn’t elaborate.
Another Hon Hai subsidiary, CyberTAN Technology Inc (建漢科技), also called off its share purchase in E-Ton, spokeswoman Lynn Kuo (郭文玲) said in a separate filing to the exchange. The supplier of broadband and wireless networking equipment had planned to buy 49 million E-Ton shares for NT$980 million.
Shares of E-Ton dropped limit-down yesterday to close at NT$47.2 on the over-the-counter market yesterday, even though its private placement pact with Inventec would bring NT$1.02 billion more in capital than a deal with Hon Hai would have. The GRETAI rose 0.24 percent yesterday.
The proceeds raised from the private placement were intended to “strengthen the firm’s working capital and repay bank loans,” E-Ton spokesman Lo Lai-hwang (羅來煌) said in an exchange filing.
Shares of Hon Hai rose 2.9 percent to NT$124 on the main bourse and CyberTAN was unchanged at NT$40.4, while Inventec edged up 0.61 percent to NT$16.6, compared with the TAIEX’s 0.52 percent rise.
Inventec said it expected the deal to help expand the economies of scale in its solar panel production while contributing more earnings outside its core business.
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