Oaktree Capital Management LLC, a US buyout firm with US$40 billion in assets, plans to take over Fu Sheng Industrial Co (
The buyout firm will offer NT$37.50 in cash for each Fu Sheng share, or 14.3 times the Taipei-based company's per-share profit last year, a press release said. The transaction values Fu Sheng at NT$33 billion including debt, it said.
NEW TO TAIWAN
The buyout would be Oaktree's first in Taiwan, where the benchmark stock index rose 3 percent this year, underperforming a 6.6 percent gain in the Morgan Stanley Capital International Asia-Pacific Index. Taking the company private will allow Oaktree to better deploy capital and help Fu Sheng expand overseas, the US firm said.
"We offer a very full price," said Bill Kerins, managing director of Oaktree, in a phone interview. "There is something we think we bring to the table in terms of taking a good, strong Taiwanese company global. That's best done as a private company."
Oaktree will team up with Lee Hou-teng (李後藤), founder and chairman of Fu Sheng, for the takeover and plans to expand the Taipei-based company's businesses in Europe and the US, Kerins said. Fu Sheng will be delisted from Taiwan's stock exchange after the takeover is completed.
The tender offer, valid for 50 days, must be approved by 51 percent of shareholders and the government, the release said. Lee and his family agreed to tender their combined 46.8 percent stake.
Shares of Fu Sheng rose 6.91 percent to close at NT$36.35 on the Taiwan Stock Exchange after the announcement. The offer is 10 percent higher than the stock's closing price yesterday. Shares have dropped 4.3 percent in the past 12 months, compared to the 9.9 percent gain in Taiwan's benchmark index.
"Over the last three years, the stock has not performed well," Kerins said. "Investors in the market are pretty focused on short-term earnings, while we're focused on long-term opportunities."
RIVALS
The offer values Fu Sheng higher than rivals Advanced International Multitech Co (
Fu Sheng was trading at 13.6 times its earnings today, Bloomberg data showed.
"It may be a good time for shareholders to exit as the offer price is fair," said Michelle Cheng, an analyst at BNP Paribas Securities in Taiwan.
The golf business' profit has been hurt by higher costs, though this year's second half may improve because the price of titanium, used in golf-club heads, has stabilized, she said.
Fu Sheng, which Lee established in 1953, derives more than half of its sales from making golf-club heads, producing 15 million a year. It is also the biggest maker of industrial air compressors in China, Hong Kong and Taiwan, the release said. Sales totaled NT$25.7 billion last year.
"The air compressor business is more promising because they're already tapping growing electricity demand from China and have been getting orders from the US," Cheng said.
Atlas Copco AB, the world's biggest maker of air compressors, trades at 23 times its profit and US-based Gardner Denver Inc at 15 times.
Lee and his family agreed to reinvest a "substantial portion" of the proceeds from selling their shares in a new Taiwan holding company that will own all of Fu Sheng, the release said. The Lee family will hold a similar stake in the new company as they did in Fu Sheng, it said.
JPMorgan Chase & Co advised Los Angeles-based Oaktree on the transaction.
GROWING OWINGS: While Luxembourg and China swapped the top three spots, the US continued to be the largest exposure for Taiwan for the 41st consecutive quarter The US remained the largest debtor nation to Taiwan’s banking sector for the 41st consecutive quarter at the end of September, after local banks’ exposure to the US market rose more than 2 percent from three months earlier, the central bank said. Exposure to the US increased to US$198.896 billion, up US$4.026 billion, or 2.07 percent, from US$194.87 billion in the previous quarter, data released by the central bank showed on Friday. Of the increase, about US$1.4 billion came from banks’ investments in securitized products and interbank loans in the US, while another US$2.6 billion stemmed from trust assets, including mutual funds,
AI TALENT: No financial details were released about the deal, in which top Groq executives, including its CEO, would join Nvidia to help advance the technology Nvidia Corp has agreed to a licensing deal with artificial intelligence (AI) start-up Groq, furthering its investments in companies connected to the AI boom and gaining the right to add a new type of technology to its products. The world’s largest publicly traded company has paid for the right to use Groq’s technology and is to integrate its chip design into future products. Some of the start-up’s executives are leaving to join Nvidia to help with that effort, the companies said. Groq would continue as an independent company with a new chief executive, it said on Wednesday in a post on its Web
Even as the US is embarked on a bitter rivalry with China over the deployment of artificial intelligence (AI), Chinese technology is quietly making inroads into the US market. Despite considerable geopolitical tensions, Chinese open-source AI models are winning over a growing number of programmers and companies in the US. These are different from the closed generative AI models that have become household names — ChatGPT-maker OpenAI or Google’s Gemini — whose inner workings are fiercely protected. In contrast, “open” models offered by many Chinese rivals, from Alibaba (阿里巴巴) to DeepSeek (深度求索), allow programmers to customize parts of the software to suit their
JOINT EFFORTS: MediaTek would partner with Denso to develop custom chips to support the car-part specialist company’s driver-assist systems in an expanding market MediaTek Inc (聯發科), the world’s largest mobile phone chip designer, yesterday said it is working closely with Japan’s Denso Corp to build a custom automotive system-on-chip (SoC) solution tailored for advanced driver-assistance systems and cockpit systems, adding another customer to its new application-specific IC (ASIC) business. This effort merges Denso’s automotive-grade safety expertise and deep vehicle integration with MediaTek’s technologies cultivated through the development of Media- Tek’s Dimensity AX, leveraging efficient, high-performance SoCs and artificial intelligence (AI) capabilities to offer a scalable, production-ready platform for next-generation driver assistance, the company said in a statement yesterday. “Through this collaboration, we are bringing two
RSS