Sat, Nov 25, 2006 - Page 1 News List

US' Carlyle Group interested in buying chip packager ASE

By Jason Tan and Lisa Wang  /  STAFF REPORTERS

Advanced Semiconductor Engin-eering Inc (ASE, 日月光半導體), the world's biggest chip packager, yesterday confirmed that it had received an expression of interest from a consortium of investors led by the Carlyle Group.

"We received an offer from Carlyle to purchase our shares," ASE spokesman Richard Chang (張洪本) said in a filing to the Taiwan Stock Exchange late evening yesterday.

He said Carlyle, a Washington-based buyout firm, had offered to buy all of ASE's outstanding common shares at a price of NT$39 (US$1.19) per share, or equivalent to approximately US$5.94 per American Depositary Share.

The total amount, US$5.46 billion (NT$179.27 billion), could make it the highest-paid acquisition in Taiwan.

The offer of NT$39 per share is a 9.86 percent premium to ASE's closing price yesterday at NT$35.5. Carlyle said it represents a 23.5 percent premium on the stock's 30-day average closing price.

Jason Chang (張虔生), chairman and CEO of ASE -- who holds 18.4 percent of the company together with affiliate ASE Enterprises Ltd -- will join the bidding group and exchange his shares for Carlyle's, the statement said.

Carlyle said in a statement that an acquisition would offer ASE more chip-assembly and testing business globally.

ASE may gain orders from Jazz Semiconductor Inc and Toshiba Ceramics Co, both owned by Carlyle, which in September decided to purchase Freescale Semiconductor Inc for US$17.6 billion -- the biggest technology buyout ever.

But both parties have yet to reach a conclusion and discussions are still ongoing, Richard Chang said.

The company also pointed out that discussions with Carlyle have not been completed and there can be no assurance that an offer will ultimately be made by the US investor. ASE said both shareholders and investors should exercise caution in dealing in company shares, adding it would make another announcement at an appropriate time.

Commenting on the planned buyout deal, Crystal Lee (李懿薇), a semiconductor analyst with ABN AMRO Asia (荷銀投信) in Taipei, said the size of premium was not particularly high, compared to other buyout cases.

Lee said it was difficult to judge how the offer would impact the Taiwanese chip packager, as no details were given about any blueprint for ASE's future.

The acquisition news first leaked early yesterday as the Chinese-language Economic Daily News reported that ASE, along with Acer Inc, Quanta Computer Inc (廣達電腦) and Lite-On Technology Corp (光寶科技) were possible acquisition targets for Carlyle.

Lee said that recent private fund buyout deals could create a synergy in the industry supply chain that could not be matched by individual companies.

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