Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), the world’s biggest chip packager and tester, yesterday said it plans to acquire a 25 percent share of its main local rival, Siliconware Precision Industries Co Ltd (SPIL, 矽品精密), for up to NT$35 billion (US$1.06 billion) in an effort to fend off growing competition from China.
The hostile takeover bid came as a bombshell to SPIL’s board, as it was not approached for a deal and the companies have been in a long-term race for industry leadership.
ASE said it plans to buy the maximum 779 million SPIL shares, combining common shares and SPIL’s American depositary receipts, at NT$45 per share, in cash.
The offer represents about a 34 percent premium, compared with SPIL’s closing price of NT$33.5 in Taipei trading yesterday.
“The 34 percent premium is very attractive,” said a fund manger, who declined to be named.
Foreign investors hold about a 58 percent stake in SPIL, while SPIL chairman Bough Lin (林文伯) only owns 2.2 percent.
“ASE aims to cooperate with SPIL through this acquisition proposal,” ASE spokesman Joseph Tung (董宏思) said at a media briefing yesterday.
“We are willing to have discussions with SPIL’s management for more details,” he said.
ASE believes local chip packagers should seek cooperation opportunities to cope with intensifying competition globally and to fend off new entrants in China, Tung said.
Jiangsu Changjiang Electronics Technology Co (江蘇長電) has made a US$780 million offer to buy its Singapore rival, STATS ChipPAC Ltd, as China is stepping up its efforts to expand its presence in the world’s semiconductor industry. The merger is to create an entity with scale equal to SPIL.
STATS ChipPAC is the world’s No. 4 chip packager.
Tung said ASE is not going to intervene in the operations of SPIL, or seek a seat in the company’s boardroom before agreements are reached between the companies.
ASE plans to buy SPIL shares from Monday next week to Sept. 22. The acquisition is to be considered successful if ASE can acquire 155.82 million shares, or 5 percent of SPIL’s total outstanding shares, ASE said in a statement.
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