Elevator supplier Yungtay Engineering Co Ltd (永大) on Friday said that Japan’s Hitachi Group has proposed a tender offer to acquire the company’s common shares on the open market at NT$60 per share.
The public offer represented a premium of 16.28 percent compared with Yungtay’s closing price of NT$51.60 in Taipei trading.
The Taipei-based company said in a statement that it learned from Hitachi’s Web site that the Japanese firm plans to acquire 156,619,362 to 360,964,461 shares, the equivalent of about 38.32 to 88.32 percent of its issued and outstanding shares.
Yungtay’s honorary chairman Hsu Chou-li (許作立) has signed a contract with Hitachi saying that he will tender his 4.27 percent of shares after the proposed tender offer is filed and published, the firm said.
However, as Yungtay operates several subsidiaries in Shanghai, Tianjin and Sichuan Province in China, Hitachi would first need to obtain approval from Chinese authorities before initiating the offer, Yungtay said.
“If Hitachi is unable to obtain the merger clearance from the State Administration for Market Regulation of the People’s Republic of China, it will not proceed with the proposed tender offer,” Yungtay said in the statement.
Yungtay, established in 1966 with capital of NT$4.11 billion (US$132.6 million at the current exchange rate), is a leading elevator and escalator supplier in Taiwan and China, with 5,149 employees as of Dec. 31 last year.
It reported consolidated revenue of NT$16.75 billion last year, with operating profit of NT$1.48 billion and net profit of NT$1.13 billion. Earnings per share (EPS) were NT$2.76.
In the first nine months of this year, revenue was NT$11.44 billion, down 12.43 percent from the same period last year, while EPS hit NT$1.05 in the first half, compared with NT$1.74 a year earlier.
Hitachi has been a Yungtay partner for more than 50 years.
The Japanese group owns 11.7 percent of Yungtay’s shares — 7.8 percent of the shares are held by Hitachi Ltd and 3.9 percent by Hitachi Building Systems Co — and it intends to gain 100 percent ownership of the Taiwanese company with the offer, a statement posted on its Web site said.
The offer reflects the Japanese electronics conglomerate’s ambition to combine Yungtay’s cost competitiveness with Hitachi’s advanced technology to gain a solid footing in the global elevator and escalator market, the statement said.
“With the acquisition, Hitachi aims to enhance the elevator and escalator business in China and Asia by increasing the competitiveness of its products, and accelerating the global expansion of its product and service businesses,” it said.
Hitachi said it plans to proceed with the tender offer next year, with the completion of the deal subject to approvals from Taiwan’s Fair Trade Commission, the Investment Commission and all other regulatory authorities.
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