Tong Lung Metal Industry Co (東隆五金), a leading door lockset maker, yesterday said it had been informed of a NT$3.7 billion (US$125.2 million) tender offer by Stanley Black & Decker Inc.
The Taiwanese locksmith said in a filing to the Taiwan Stock Exchange that the US company had offered to buy its shares at NT$41.05 each on the open market between yesterday and July 10.
Stanley Black & Decker, which was formed by a US$4.5 billion all-stock merger of Stanley Works and Black & Decker Corp in 2010, plans to acquire between 45.91 million and 90.12 million common shares of Tong Lung to make the firm a wholly owned unit, the filing said.
Shares of Tong Lung — known for making “Ezset”-brand locks for overseas markets as well as “Lucky” and “Posse” brands for the domestic market — closed up by the 7 percent daily limit yesterday on the GRETAI Securities Market, after its biggest shareholder, Test Rite International Co (特力), announced on Monday that it would sell all its stock in Tong Lung to Stanley Black & Decker.
The US company’s purchase price of NT$41.05 per Tong Lung share represented an 8.74 percent premium on Tong Lung’s closing price of NT$37.75 on Monday and a 1.73 percent premium on yesterday’s closing price of NT$40.35.
Shares of Test Rite, a domestic trading and retail group that owns a 68.3 percent share of Tong Lung, closed at NT$19.55 on the Taiwan Stock Exchange yesterday, up 1.82 percent from the previous day.
Tong Lung hovered on the brink of bankruptcy in 1998, but emerged from restructuring in 2001 and re-listed its shares on the over-the-counter GRETAI in March 2006.
It will delist its shares on GRETAI following the tender offer, which is expected to be completed in the third quarter.
Test Rite bought 51.25 million common shares of Tong Lung in 2006 for approximately NT$2.18 billion because it wanted to enter the hardware market for security solution applications. The company said it was expected to book a profit of NT$33 million through the share sale in Tong Lung.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
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PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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