Asustek, Pegatron eye same-day listing

REMOVING THE GAP:The path is set for the parent and spin-off companies to list on the Taiwan Stock Exchange on the sam–e day to quell institutional investor concerns

By Jason Tan  /  STAFF REPORTER

Sat, Jan 02, 2010 - Page 12

Asustek Computer Inc (華碩電腦), maker of the popular Eee PC netbook, yesterday said it expected to list its shares on June 24, with shares of subsidiary Pegatron Technology Corp (和碩聯合) to be listed the same day if regulators give the green light.

“If Pegatron completes all the required applications for the ­regulator approval in time, we ­expect its shares to be listed on the same date,” the company said in a statement after convening a board meeting yesterday.

The same-day listing is feasible once the documents for Pegatron’s initial public offering are filed, and the company meets the listing criteria required by regulators, the statement said.

To facilitate the spinoff and ­reduce uncertainties, Pegatron will be managed by Pegatron International (和碩國際投資) — an existing company wholly owned by Asustek — instead of by a newly incorporated company as earlier intended. Furthermore, the earlier proposed spinoff date of July 1 would be moved up to June 1.

Asustek announced on Dec. 11 it would spin off its manufacturing arm Pegatron by reducing its ­holding to 25 percent and reducing Asustek’s capital by 85 percent. Under the deal, current Asustek shareholders will receive approximately 0.15 shares of Asustek and 0.4 shares of Pegatron for each Asustek share they own.

However, institutional investors have been concerned by the move because of the period of time when Asustek shares would be listed, but Pegatron shares would not.

To quell shareholder concerns, Pegatron hoped to list both firms on the same day, Pegatron chief executive officer Jason Cheng (程建中) told investors late last month. He said Pegatron has lost orders amid brand clients’ ­concerns over its heavy dependence on Asustek as its major client.

The Taiwan Stock Exchange Corp (TWSE, 台灣證交所) said on Tuesday it planned to amend the listing rules for spin-off companies, a move that would allow Asustek to speed up the listing of its contract manufacturing unit by a few months.

The TWSE is considering extending the deadline for companies to apply for a listing of a unit under a simplified review process from within one year of the unit’s spinoff to three years.

The simplified review of a listing application would cut the regular review process — which normally lasts between three and five months — to as little as two months, the stock exchange said.

A simplified review process for a listing application would require the applicant to have a business record and involves fewer regulatory agencies than the regular review, which requires the applicant to have been in existence for three years and to have been profitable.