Acer Inc, the world's fourth-largest personal computer maker, yesterday saw its share prices plunge by the daily limit for the second day, reflecting market doubts over its bid for US-based Gateway Inc.
"We will continue to communicate with investors and the media on the buyout" to allay market concerns over the deal, Acer spokesman Henry Wang (
"The announcement [made on Monday] was made immediately after the deal had been sealed. More communication will take place once concrete details are available," Wang said.
Shares closed down nearly 7 percent to NT$55.10 (US$1.7) yesterday on the Taiwan Stock Exchange, marking the largest two-day drop since the company's initial public offering in September 1996.
Investors were worried about the stock after analysts slashed their rating recommendations for Acer as they believed the deal -- in which Acer agreed to offer a 57 percent premium over Gateway's closing price last Friday -- was too expensive.
Acer chairman Wang Jeng-tang (
"The merger will be a success. And if we fail, I will quit my position," the Chinese-language Economic Daily News quoted Wang as saying earlier yesterday.
Acer said on Monday it would buy US-based Gateway for US$710 million, in a deal that would push it past China's Lenovo Group Ltd (
Fitch Ratings yesterday placed its ratings on Acer on "Rating Watch Negative," putting more pressure on the company.
Fitch said in a statement it was concerned over Acer's multiple-brand strategy, possible lower profitability during the initial stages of the merger and Acer's reduced cash positions after the deal.