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Carlyle's exclusive deal with ASE's chairman annulled

Advanced Semiconductor Engineering (ASE, 日月光半導體), the world's top chip packager, said yesterday that the private equity fund consortium led by Carlyle Group agreed to terminate an exclusive deal with chairman Jason Chang (張虔生) as part of a potential buy-out bid.

The Carlyle Group agreed to terminate the exclusivity, expense reimbursement and breakup fee arrangements with Chang, effective immediately, ASE said in a filing to the Taiwan Stock Exchange.

Kaohsiung-based ASE said that it was still assessing the feasibility of the NT$179.27 billion (US$5.45 billion) bid from the Washington-based private equity investor.

"This does not mean Chang is in talks with any new bidders, or seeking new buyers," ASE spokesman Freddie Liu (劉詩亮) told the Taipei Times. "The company's taskforce is still evaluating Carlyle's offer."

Last November, Chang announced that he would sell an 18.4 percent-stake in ASE owned by himself and his family at NT$39 per share if the Taiwanese company agreed to sell all of its outstanding shares to Carlyle.

"The price might not be attractive for Chang now, as the stock price rallied after the buy-out offer was unveiled," said Eric Chen (陳慧明), a semiconductor industry analyst with BNP Paribas Securities in Taipei.

ASE shares jumped 5.77 percent since the announcement was made in late November, outperforming the benchmark TAIEX index's 5.14 percent gain during the same period. The stock closed at NT$37.55 on Wednesday.

The closing price of ASE represented a 3.86 percent premium to Carlyle's offer.

It was too early to say if the buy-out bid would fail, but "the end of Carlyle's exclusivity [deal] could push the private equity fund consortium to raise its offer now as the door is open to other interested parties," Chen said.

He said that if the buyout talks failed, ASE would not delist from the TAIEX.

ASE has NT$173 billion in market value, compared with the TAIEX's NT$19.31 trillion.

ASE would lose an opportunity if the deal fails, but it would not heavily impact on the industry as the management team would stay in Taiwan, Minister of Economic Affairs Steve Chen (陳瑞隆) said yesterday.

As far as he was aware, the buyout was proceeding, Chen said. The termination of an exclusivity deal was merely avoiding a conflict of interest, he said.
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