Sat, Sep 26, 2015 - Page 14 News List

SPIL, ASE trade blows on Hon Hai share swap deal

By Lisa Wang  /  Staff reporter

Advanced Semiconductor Engineering Inc (ASE, 日月光半導體) yesterday said a share swap is not the only option for Siliconware Precision Industries Co (SPIL, 矽品精密) to form a strategic alliance with Hon Hai Precision Industry Co (鴻海精密), citing unsatisfactory terms.

The tussle over control of SPIL turned into a war of words, as the two firms traded blame over SPIL’s proposed share swap with Apple Inc’s primary iPhone assembler.

ASE, the world’s largest chip packager and tester, is to become SPIL’s biggest single shareholder on Wednesday next week after receiving tenders from SPIL shareholders for a 25 percent stake of the firm worth NT$35 billion (US$1.05 billion).

“There are various ways for companies to enter into strategic alliances with partners,” ASE said in a statement. “SPIL did not have to issue a large amount of new shares at a steep discount, thereby diluting all of its shareholders’ interests, solely for the purpose of entering into a strategic alliance.”

Under the swap deal announced on Aug. 28, a Hon Hai share can be exchanged for 2.34 SPIL shares, which values SPIL at NT$36.02 per share based on Hon Hai’s closing price of NT$84.3 yesterday, translating into an 8.78 percent discount when compared with SPIL’s closing price of NT$39.5.

SPIL plans to issue 840 million new common shares for the deal with Hon Hai.

ASE also rejected SPIL’s accusation that it was intervening in SPIL operations by opposing the swap.

“ASE is not able to comment on the strategic alliance and vertical integration between SPIL and Hon Hai, as we do not have knowledge of the specific details of such an arrangement,” the company said in the statement. “Therefore, there is nothing supporting the claim that ASE has expressed an objection to the Hon Hai strategic alliance and that ASE has been interfering with SPIL’s operations.”

SPIL urged its shareholders to approve the deal at an extraordinary meeting scheduled for Oct. 15.

If approved, the alliance with Hon Hai would result in competition with ASE in the system-on-a-chip business, market watchers have said.

Shares of ASE rose 1.17 percent to NT$34.55 yesterday.

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