Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), yesterday said it is in talks with Siliconware Precision Industries Co (SPIL, 矽品精密) to create a joint-venture holding company in a last-ditch attempt to push for a merger of the two firms.
ASE’s proposal, if accepted, would put an end to a nine-month ownership fight, as SPIL has resisted a “hostile” takeover bid by the world’s biggest chip tester and packager.
“The company has talked to SPIL about the feasibility of forming a joint holding company. We have also exchanged views [about the proposal],” ASE said in a statement.
The company plans to make a formal announcement after the two sides reach an agreement and receive approvals from their respective boards, ASE said in the statement.
ASE’s comments came after the Chinese-language Liberty Times yesterday reported that the two firms were scheduled to announce later this week an agreement on forming an industrial holding company after a meeting between ASE chairman Jason Chang (張虔生) and SPIL chairman Bough Lin (林文伯) last month.
The proposed holding company is planning to list its shares in the US, possibly the NASDAQ, which has a higher price-earnings ratio of about 25 times, compared with 14 times for Taiwan stock exchange, the report said, citing unidentified sources.
In a separate statement, SPIL confirmed plans about forming a joint holding company.
“The negotiations are still under way and the company does not guarantee that the talks would lead to an agreement,” SPIL said in the statement.
In March, ASE proposed a new industrial holding company that would hold 100 percent equity interests in ASE and SPIL, with the two companies retaining their legal entities.
The proposal was made after ASE failed to win approval from the Fair Trade Investment Commission for its second tender offer to increase its stake in SPIL to 49 percent.
The latest proposal demonstrates ASE’s determination to fully acquire SPIL to expand the company’s economies of scale in order to fend off growing competition from Chinese rivals.
ASE has increased its holding of SPIL from about 25 percent, which it obtained via the first tender offer launched in October last year, to 33.28 percent in March.
Market reaction to the latest news was positive, with ASE shares rallying 3.84 percent to NT$32.45 and SPIL shares climbing 2.46 percent to NT$50, outperforming the TAIEX, which edged down 0.52 percent, Taiwan Stock Exchange data showed.
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