Semiconductor components distributor WT Microelectronics Co Ltd (文曄) yesterday advised its shareholders to reject an NT$8.11 billion (US$265.8 million) hostile takeover bid from bigger rival WPG Holdings Co (大聯大投資控股), saying the offer was too low and its investment rhetoric was not true.
WT said its independent directors found that WPG has underestimated the value of its stock.
The offer of NT$45.8 per share is much lower than the reasonable price range of NT$50.48 to NT$53.68 based on the assessment of Conetrue CPA (康儲聯合會計師事務所), which WT hired, it said.
“The offer price is significantly below the low end of the value of each WT Microelectronics common share as assessed by the independent financial expert,” WT said in a statement submitted to the Taiwan Stock Exchange following a review by independent board directors. “As a result, the acquisition price is not reasonable or fair.”
A merger would bring serious consequences, including disruptions to chip supply and order losses, the statement said.
WPG’s attempt to acquire a 30 percent stake in WT has raised concerns among customers and suppliers, who have asked it to provide pricing strategies and chip allocation plans, it said.
Customers are considering cutting back on orders to minimize potential risks, it said.
WPG has an approximately 70 percent share of Taiwan’s chip distribution market, it said.
The deal would sabotage the company’s operations and cause irrecoverable damage to the interests of WT’s shareholders and employees, it said.
WPG on Wednesday last week said it planned to acquire a 30 percent stake via a public tender.
WT said it was worried WPG that sought to take control, rather than be a passive investor as it claimed.
With a 30 percent stake after the transaction, WPG could easily take control as the management team only owns about 24.4 percent combined, the statement said.
“WPG’s investment rhetoric clearly contradicts its ability to intervene in operations,” it said.
WT filed a lawsuit with the Taipei District Court, accusing WPG of contravening the law.
Shares of WT Microelectronics fell 0.24 percent to NT$42.1 yesterday, while WPG Holding’s share price rose 0.66 percent to NT$38.4.
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