Acer Inc, the world's No. 3 PC maker, said yesterday it plans to take over local mobile device maker E-Ten Information System Co (倚天) for NT$9 billion (US$289.6 million) via a share swap to gain a stronger foothold in the rapidly growing smart handheld device market.
Shares will be exchanged on a 1-to-1.07 basis in favor of Acer, a company statement said.
The offer represents a 22.5 percent premium, compared with Acer's closing price of NT$55.7 yesterday.
Following the transaction, E-Ten would own about 6 percent of Acer's total outstanding shares, the statement said.
"We have been looking for new growth momentum after acquiring Gateway Inc and Packard Bell BC ... Smart handheld devices is what we are looking for," Acer chairman J.T. Wang (
Wang said consolidated revenues this year would be up 50 percent, mostly as a result of acquisitions, from last year's NT$461.7 billion.
"The worldwide smart phone market is expected to grow by more than 30 percent by 2011," Acer president Gianfranco Lanci said. "Acer will enhance the competitiveness in the ultra mobile segment by combing PC and communication technologies."
E-Ten posted NT$3.71 billion in revenues last year by selling phones primarily running on Microsoft's operating system under the brand name "Glofiish."
"Entering the handheld device market is a big move for Acer. But we believe the deal will have a positive impact on Acer," said Eddy Tseng (
Acer will benefit from the rapidly growing smart handheld device market through an investment in research and development teams at E-Ten, Tseng said.
Acer expects to unveil Acer-brand smart handheld products by the end of this year after wrapping up the deal, which is scheduled to be completed in September, Wang said.
E-Ten will be a fully owned company of Acer, but it will be delisted from the local market after the transaction, he said.
E-Ten shares jumped for seven straight trading sessions to NT$42.5 yesterday.
A senior PC analyst who asked not to be named, however, said that the takeover did not make sense as Acer could choose to sell smart phones via a more cost-effective approach by working with contract mobile phone makers, much as its rivals have been doing.
"E-Ten is not worth that much, judging [from] its technological capabilities," the analyst said.
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