Advanced Semiconductor Engineering Inc (ASE, 日月光半導體) yesterday failed to prevent Siliconware Precision Industries Co Ltd (SPIL, 矽品精密) from holding an extraordinary shareholders’ meeting after the Taichung District Court rejected an ASE injunction request.
That was the latest effort by ASE, the world’s biggest chip packager and tester, to dissuade shareholders from voting at a meeting scheduled for tomorrow in favor of SPIL’s proposed strategic alliance with Hon Hai Precision Industry Co (鴻海精密) via a share swap.
“The two companies have explained clearly the pros and cons of SPIL’s strategic alliance with Hon Hai as has been described in media reports. SPIL shareholders should make their own judgement over this deal,” the Taichung District Court said in a statement.
“Any legal intervention would hamper corporate governance practices and the free-market mechanism,” it said.
SPIL’s effort to enhance the company’s competitiveness by forming a partnership with Hon Hai should not impact the company’s operation in a negative way, the statement said.
The court also said there is no reason for ASE to block the shareholders’ meeting.
Any short-term volatility in stock prices cannot be regarded as a motive to call off the meeting, the statement said.
ASE has become the biggest shareholder in SPIL after securing a 25 percent stake — 779 million shares — of its local rival in a tender offer worth NT$35 billion (US$1.07 billion) last month.
SPIL plans to issue 840 million new common shares for its deal with Hon Hai, allowing the assembler of Apple Inc’s iPhones to hold 21 percent, which would dilute ASE’s holding to about 19 percent after SPIL’s issued capital expands to 3.96 billion shares. SPIL would own a 2.2 percent stake in Hon Hai.
On Friday last week, ASE filed an injunction with the district court in an attempt to forbid SPIL from holding the shareholders’ meeting, accusing SPIL’s management of depriving it of the right to vote against the proposal.
ASE yesterday expressed regret over the court ruling, saying that it would consult with lawyers to decide whether to take follow-up legal action.
The company said it took legal action to bar the meeting because it felt it was unfair that even though the company has become the largest shareholder of SPIL, it is not allowed to attend tomorrow’s meeting to vote, because the registration deadline for the meeting was Sept. 16.
ASE added that its shareholders’ rights would be seriously undermined if the meeting and the deal are allowed to go through.
In addition, it claimed it would lose NT$7.1 billion if SPIL shareholders approved the SPIL-Hon Hai partnership.
Additional reporting by CNA
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