Thu, Sep 24, 2015 - Page 13 News List

ASE says chairman opposed to SPIL’s proposal to swap shares with Hon Hai

By Lisa Wang  /  Staff reporter

Advanced Semiconductor Engineering Inc (ASE, 日月光半導體) yesterday said in a statement that its chairman, Jason Chang (張虔生), at a meeting with Siliconware Precision Industries Inc (SPIL, 矽品精密) chairman Bough Lin (林文伯) expressed his opposition to SPIL’s plan to swap shares with Hon Hai Precision Industry Co (鴻海精密).

The meeting was the first between high-ranking executives of the two firms since ASE announced a tender offer last month to take an up to 25 percent stake in its smaller rival.

ASE, the world’s top chip packager and tester, successfully solicited 779 million shares, or a 25 percent stake, from SPIL shareholders at NT$45 per share on Tuesday as planned. The transaction is to be completed on Wednesday next week.

In fact, ASE surpassed its upper limit of 25 percent, reaching 36.83 percent of SPIL shares, even though SPIL and Hon Hai held several news conferences over the past few weeks in a bid to persuade shareholders not to sell their shares to ASE.

“SPIL’s plan to issue new common shares in exchange for Hon Hai shares will dilute shareholders’ equity,” ASE said in a statement. “To safeguard SPIL shareholders’ interests, ASE believes Lin will seriously reconsider the feasibility of the share swap.”

In response, SPIL said the swap — which values the firm at NT$37.86 per share — will require ratification by shareholders at an extraordinary meeting on Oct. 15.

The share swap plan would leave Hon Hai as the largest SPIL shareholder, as the Apple Inc iPhone assembler would have a 21.24 percent share compared with ASE’s about 19 percent stake should SPIL follow through and add 840 million new shares to the existing 3.11 billion capital shares.

If shareholders ratify the plan next month, the share swap is to be completed on Dec. 1.

ASE is not qualified to vote on the SPIL-Hon Hai deal at the meeting, as only investors registered one month before a meeting, in this case Sept. 15, count as shareholders.

However, some analysts said the results of the tender offer imply a strong message from SPIL shareholders that some of them might veto the swap plan at the Oct. 15 meeting.

In the statement, ASE said it would not interfere with SPIL’s operations and would not interfere or damage the rights and interests of SPIL’s employees.

ASE said it plans to explore future cooperation opportunities with SPIL, in a manner consistent with all applicable laws, in order to maintain and improve the competitiveness of both firms in the face of growing challenges due to global competition and a trend of consolidation in the semiconductor industry.

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