Advanced Semiconductor Engineering Inc (ASE, 日月光半導體) yesterday confirmed that it failed in its second tender offer to buy an additional 24.7 percent stake in rival Siliconware Precision Industries Co (SPIL, 矽品精密) due to regulatory indecision.
The tender offer, launched on Dec. 29 last year, was unsuccessful as the Fair Trade Commission (FTC) has not approved nor rejected the deal, which expired yesterday, ASE told a briefing at the Taiwan Stock Exchange after the local stock markets closed.
More than 27.57 percent of SPIL shareholders participated in the tender offer and ASE said it has instructed its tender agents to return all shares to participating investors.
Photo: Chen Chih-chu, Taipei Times
“Our determination to seek integration with SPIL remains unchanged, and we will continue to garner the support of SPIL shareholders to complete the acquisition of 100 percent equity interest in SPIL,” ASE chief financial officer Joseph Tung (董宏恩) said at the news conference.
Despite the setback, ASE said it is proposing to establish an industrial holding company that would hold 100 percent equity interests in both ASE and SPIL, with the two companies retaining their legal entities.
Under the planned holding company, ASE and SPIL are to become sibling firms under the same parent organization, according to a statement issued by ASE.
In addition, the two companies are to be delisted from the the stock exchange, while shares of the proposed holding company are to be listed in their place, the statement said.
ASE said shareholders would not be affected by the proposed change, as their current holdings will be converted into shares of the holding company.
“The holding company establishes a precedent for a framework guiding future collaborations and consolidations across the industry’s supply chain,” ASE chief operating officer Tien Wu (吳田玉) said.
“The greatest advantage is flexibility, as participants can collaborate in appropriate market segments, or form alternative arrangements otherwise to maximize synergistic gains,” Wu said.
Taiwan’s semiconductor packaging and testing industry is facing an unprecedented and intense challenge at a time when rival integrated device manufacturers and outsourced assembly and test service providers across the globe are boosting their competitiveness through large-scale mergers and acquisitions, Wu said.
Tung said the plan to establish the holding company will be carried out regardless of the progress in the ASE-SPIL deal, as it is the best option in facing current challenges.
While ASE failed in its latest tender offer, the company can still proceed with the tender offer after one year under the Securities and Exchange Act (證券交易法).
The Financial Supervisory Commission has said that it will consider exempting ASE from a rule barring subsequent tender offers for one year following a failed attempt, if the FTC approves the acquisition.
SPIL yesterday said in a statement that the FTC should suspend its review of the original tender offer deal and ask ASE to submit a new application for its holding company proposal.
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