Mon, Apr 15, 2019 - Page 16 News List

Commission approves Hitachi’s bid for Yungtay

By Chen Cheng-hui  /  Staff reporter

The Investment Commission on Friday approved Hitachi Ltd’s application for a public tender offer for elevator supplier Yungtay Engineering Co Ltd (永大電機).

The Japanese conglomerate plans to acquire Yungtay’s common shares at NT$65 each on the open market through its subsidiary Hitachi Elevator Taiwan Co Ltd (台灣日立電梯). The tender offer began on Jan. 17 and runs through Monday next week.

The maximum number of shares to be acquired is 360.96 million, or 88.32 percent of Yungtay’s issued shares, while the minimum for the acquisition is 88.5 million, or 21.66 percent, Hitachi said.

The commission’s approval of the investment application is one of the conditions for completion of the public tender offer, it said, adding that the offer is still awaiting clearance from the Fair Trade Commission.

Hitachi’s request to invest US$760.37 million for the deal was approved, as it posed “no national security or industry impact concerns on local manufacturers,” Investment Commission spokesperson Yang Shu-ling (楊淑玲) said in a statement.

However, investors still need to assess the risks of selling their shares themselves, Yang said.

Tokyo-based Hitachi owns 11.7 percent of Yungtay’s shares and intends to gain 100 percent ownership of the Taipei-based firm through the offer, making the latter a wholly owned subsidiary.

While Hitachi is the sole buyer in the deal and faces no competing bidders, Yungtay independent director Chen Shih-yang (陳世洋) has opposed the offer and proposed an extraordinary shareholders’ meeting on Thursday to elect a new board of directors.

However, Hsieh Yung-ming (謝永明), another independent director, last week said the offer was reasonable and there was no justification for an extraordinary meeting.

Yungtay, established in 1966, reported net profit for last year decreased 40.18 percent year-on-year to NT$674.75 million (US$21.85 million at the currect exchange rate), while revenue dropped 11.28 percent to NT$14.86 billion over the same period. Earnings per share were NT$1.65.

Yungtay shares on Friday closed 0.31 percent higher at NT$64.4 in Taipei trading. The stock has advanced 8.78 percent so far this year.

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