Hon Hai Precision Industry Co (鴻海精密) saw its shares edge up 0.32 percent yesterday after inking a letter of intent with Asia Pacific Telecom Co (亞太電信) to buy a 14 percent stake worth NT$11.67 billion (US$387 million) and to negotiate a merger with the telecom.
Hon Hai’s stock price rose to NT$92.8 yesterday, after it beat rival Ting Hsin International Group (頂新國際集團) in the bidding for Asia Pacific Telecom shares.
Shares of Asia Pacific Telecom rallied 1.12 percent to close at NT$18.5, retreating from their 7 percent daily-limit gain during early trading.
Hon Hai said on Monday that its telecom subsidiary Ambit Microsystems Corp (國碁電子) has signed a letter of intent to subscribe for 583 million common shares, or 70 percent of the new shares offered by Asia Pacific Telecom, via a private placement at NT$20 per share, according to its filing with the Taiwan Stock Exchange.
“Because of the offering price, the vertical integration effect and the opportunity for better 4G development, we tapped Hon Hai [as a strategic partner],” Ambit Microsystems spokesperson Hong Long-chu (洪龍珠) told a media briefing yesterday.
Ambit Microsystems also obtained the rights to introduce another strategic investor into Asia Pacific by subscribing for the remaining 243 million common shares at the same price of NT$20 per share, the filing said.
The deal will make Hon Hai the largest shareholder of Asia Pacific Telecom, surpassing the Taiwan Railways Administration (台鐵), which owns a stake of 12 percent, and will play a key role in steering the telecom into the 4G era.
Asia Pacific Telecom will be the survival company, while Ambit Microsystems will disappear after the merger takes effect, which is likely to be in a few years.
Asia Pacific Telecom is scheduled to launch a test run of its 4G services in the fourth quarter of this year, while Ambit Microsystems is to start offering 4G services in 2016.
Yuanta Securities Co (元大證券) analyst Vincent Chen (陳豐丰) said in a report issued yesterday that as long as Hon Hai takes control of Asia Pacific Telecom “the price of NT$11.66 billion is worth it.”
Otherwise, it would be too expensive to pay NT$40,000 per user since Asia Pacific Telecom made scant profits, Chen said.
Asia Pacific Telecom has 2.09 million subscribers and operates 2,000 base stations, as well as a 10 Megahertz (MHz) 4G bandwidth, which will help Ambit Microsystems accelerate its entry into the 4G market. Ambit Microsystems holds a 20 MHz 4G bandwidth.
In the report, Chen retained his “buy” rating on Hon Hai stock based on a 12-month target share price of NT$100.
Hon Hai posted NT$755 billion cash and cash equivalents in the first quarter of this year, up from NT$678.9 billion in the same period last year.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last