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.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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