Taiwan Cellular Corp (
The target company -- TransAsia Telecommunications Inc (
Another local Chinese-language newspaper said that TransAsia Telecommunications will be bought up by the nation's biggest mobile telephone company for NT$12 billion (US$365 million) -- a story Taiwan Cellular denied.
Pundits close to the plan claimed the news would be confirmed by Taiwan Cellular today. One anonymous Taiwan Cellular executive said the company was forbidden from making any public announcement on the plan without first consulting with the Securities and Futures Commission (
The purchase of TransAsia, based in Taiwan's second-biggest city of Kaohsiung, may herald further consolidation in the local wireless industry.
Of six licensed mobile telephone operators in Taiwan, only Far EasTone Telecommunications Ltd (遠傳電信), Chunghwa Telecom Co (中華電信), Taiwan Cellular, and KG Telecommunications Co (和信電訊) have nationwide coverage. Trans-Asia only has a license to deliver services to southern Taiwan.
"If Taiwan Cellular purchases TransAsia, it will be in order to secure their position as the market leader in Taiwan," said Cheng Yi-sheng, who helps manage NT$1.6 billion in Taiwan stocks at Taiwan Securities Ltd (台証證券).
Goldman Sachs Group Inc, TransAsia's adviser, refused to comment on the potential deal.
In September, Far Eastern Textile Ltd (遠東紡織), which owns 50 percent of Far EasTone, paid NT$510 million for 4.25 percent of Mobitai Communications Ltd (東信電訊).
Far EasTone, Taiwan's third-biggest mobile phone carrier, "was still in contact" with TransAsia executives about purchasing a stake in the company, said President Joseph O'Konek of Far EasTone. O'Konek refused to comment further.
"If Far EasTone had bought TransAsia, then it would have brought their subscriber numbers close to Taiwan Cellular," Cheng said.
At the end of March, Taiwan Cellular had 5.39 million users and Far EasTone had 3.7 million.
TransAsia's largest shareholder is SBC Communications Inc, the second-largest phone company in the US, which has a 44 percent stake. SBC Communications spokeswomen Saralee Boteler wouldn't comment on whether the company had sold its stake in TransAsia.
TransAsia's other major shareholders are Taiwan-based companies Goldsun Development and Construction Group (
Taiwan Cellular shares fell NT$0.6, or 1.2 percent, to NT$48.1 yesterday. The stock has dropped 46 percent since it began trading on Sept. 18 last year.
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