Fri, Jul 15, 2011 - Page 11 News List

Yageo rejection will not hurt sentiment: Nomura

BUYERS WANTED:Nomura says foreign private equity funds want local buyers and are looking for partnerships with local food makers that know the Chinese market

By Crystal Hsu  /  Staff Reporter

Foreign funds are more interested in seeking buyers from Taiwan than acquiring firms here and the government’s recent rejection of the buyout plan of Yageo Corp (國巨) by a US private equity fund will not dampen sentiment, Nomura Securities Taipei branch said yesterday.

“More firms are scouting for potential Taiwanese buyers than [those] trying to acquire stakes in local companies as Asia fares better than the US and Europe in terms of economic showing,” Amy Tsao (曹慧珠), head of Nomura Taipei, said at a media briefing.

The Tokyo-based financial -services group and global investment bank received inquiries about merger and acquisition opportunities both in technology and non-technology sectors, Tsao said.

Interested parties include foreign private equity funds, unaffected by Taiwan’s rejection last month of Orion Investment Co’s (遨睿投資) offer to buy a majority stake in Yageo, the nation’s leading passive electronic component maker, for NT$46.8 billion (US$1.6 billion) in cash.

Orion is owned jointly by Yageo founder Pierre Chen (陳泰銘) and US investment fund Kohlberg Kravis Roberts & Co LP.

Taiwan blocked the deal on concerns over its lack of -transparency, the buyer’s financial health and the plan to delist Yaego from the local bourse.

“Yaego is a special case and will not discourage deals under talks,” Tsao said.

Nomura Taipei executive director Bernice Liu (劉慧儀) said foreign firms also take notice of warming cross-strait trade ties and are seeking opportunities to work with Taiwanese food makers familiar with the Chinese market.

Nomura, which helped TPK Holding Co (宸鴻) and United Microelectronics Corp (UMC, 聯電) issue convertible bonds in April and May respectively, expected more firms to take advantage of current low interest rates to raise funds in the second half to expand facilities and strengthen capital structure.

“Bonds will remain a good instrument in the second half,” Tsao said, adding that the funding might not be as large as seen in the first half.

Nomura was the lead manager of TPK’s US$400 million bond sales and UMC’s bond issuance, valued at US$500 million.

The volume earned the Japanese firm a No. 1 ranking, with 23.8 percent market share in terms of equity-linked deals so far this year, followed by JPMorgan Chase at 18.5 percent and Barclays Capital at 14.8 percent, Nomura data showed.

In terms of financial advisers, Nomura ranked No. 2 last year, with a market share of 10.6 percent, after Yuanta Financial Holding Co’s (元大金控) 26.0 percent.

Nomura set up its Taiwan branch in 1995 and currently has more than 50 staff, including a dozen research analysts.

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