Shares of game developer XPEC Entertainment Inc (樂陞科技) yesterday plunged by the 10 percent daily limit after a Japanese company canceled plans to invest in the company.
XPEC management sought to reassure investors by saying it would consider a management buyout to protect shareholders’ interests.
“I will do my best to raise funds as soon as possible to carry out a management buyout at NT$128 per share to meet investors’ expectations,” XPEC chairman Aaron Hsu (許金龍) said in an open letter to shareholders yesterday morning, before equity markets opened.
Photo: Chang Hui-wen, Taipei Times
Japan’s Bai Chi Gan Tou Digital Entertainment Co (百尺竿頭) on Tuesday evening said it had decided to abandon its plan to acquire a 25.17 percent stake — or 38 million common shares — in XPEC at NT$128 per share, following a plunge in XPEC shares over the past few months.
Hsu said that if shareholders were worried that XPEC shares would not return to above NT$120 after Bai Chi scrapped the NT$4.68 billion (US$147.51 million) deal, XPEC would consider a buyback scheme at NT$128 per share.
He did not specify how the company would finance the buyback.
Shareholders of XPEC apparently were not impressed, sending the company’s shares down by the daily limit to NT$70.20 a few minutes after trading started. That was the lowest level since Jan. 22.
A total of 888,000 shares were traded on the Taipei Exchange, with sell orders for 16.16 million shares still waiting to be executed in the next session.
Independent analyst Lee Kuan-chi (李冠嶔), formerly an equity strategist for Everyoung Securities Investment Consulting Co (聚陽投顧), cast doubt on XPEC’s ability to execute the buyback scheme.
As XPEC only has NT$673.27 million in cash and cash equivalents at the end of last quarter, how would the company raise enough funds to initiate the scheme, the Chinese-language online news provider Cnyes.com quoted Lee as saying.
Meanwhile, several XPEC shareholders established a self-help group on Facebook yesterday morning. By evening, the group had attracted more than 1,500 members.
The self-help group called on XPEC shareholders to gather at the Financial Supervisory Commission tomorrow morning to protest against the commission’s failure to intervene in the case before Bai Chi canceled the deal.
The self-help group said the commission should have helped XPEC investors sooner and prevented Bai Chi from exploiting loopholes in Taiwan’s public tender offer regulations.
The commission yesterday said it had urged Bai Chi to fulfill its payment and reiterated its demand that the Japanese firm shoulder its responsibilities in accordance with the Securities and Exchange Act (證券交易法).
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