Taiwan Fixed Network Ltd (台灣固網), one of Taiwan's three new fixed-line telephone companies, paid NT$13.3 billion (US$397 million) for a 9.3 percent stake in Taiwan Cellular Corp (台灣大哥大), Grand Cathay Securities Corp said.
Taiwan Fixed Network purchased 341.8 million shares in Taiwan's biggest mobile phone company in two days, falling short of its goal of buying 429 million shares, or an 11.7 percent stake, said Wen Jing-man, an official in the finance department at Grand Cathay Securities Corp (大華證券), which is advising Taiwan Fixed Line.
Taiwan Fixed Network will have to reapply to the Taiwan OTC Exchange if it wants to buy more shares in Taiwan Cellular, according to regulations. The company bought 51.6 million shares yesterday at an average price of NT$40.29 a share and bought 290.2 million shares today at an average price of NT$38.79.
Taiwan Fixed Network wants a stake in Taiwan Cellular in order to offer mobile as well as traditional fixed-line phone services this year, drawing customers away from former monopoly Chunghwa Telecom Ltd. Taiwan Fixed Network spokesman Ting Hsien-wen (
"It's a strategic alliance between a fixed-line and a mobile company," said James Liu, who manages NT$3 billion in Taiwan stocks at ING CHB Security Investment & Trust Co.
Subscribers Taiwan Cellular had 5.39 million customers at the end of March. Chunghwa Telecom had 5 million, KG Telecommunications Co (和信電訊) had 3.79 million and Far EasTone Telecommunications Ltd (遠傳電信) had 3.7 million customers.
Taiwan Cellular said earlier this month it will buy 97 percent of regional rival TransAsia Telecommunications Inc (泛亞電信) for NT$13.5 billion.
Acer Inc (宏電), a Taiwan computer maker, was among the companies that sold their stock in Taiwan Cellular. Acer sold 30 million Taiwan Cellular shares to Taiwan Fixed Network yesterday at an average price of NT$40.30 a share in a bid to improve its second- quarter profit, Acer spokesman Henry Wang (汪島雄) said.
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