Semiconductor components distributor WT Microelectronics Co Ltd (文曄科技) yesterday announced a NT$6.75 billion (US$222.02 million) share-swap deal with IC designer ASMedia Technology Inc (祥碩), a subsidiary of Asustek Computer Inc (華碩), to jointly tap into China’s server and computer markets.
Each ASMedia share would be exchanged for 19 WT shares, WT vice president and spokeswoman Cheryl Yang (楊幸瑜) told a news conference in Taipei, after the companies’ boards approved the deal.
The share swap, aimed at strengthening cooperation between the firms, would result in WT claiming a 13.04 percent stake in ASMedia, which would in turn hold a 22.39 percent stake in WT, she said.
WT is to issue about 171 million new shares, valuing the deal at NT$6.75 billion based WT’s closing price of NT$39.5 on Thursday, while ASMedia is to issue 9 million new shares, she added.
The deal is expected to be completed by March 20, Yang said.
“We have a very optimistic outlook for the market in the near future ... despite the [COVID-19] epidemic,” WT chairman Eric Cheng (鄭文宗) said as he pointed to upcoming deployments of 5G technology.
“High-speed interfaces for data transmission would be one of the key technologies [in 5G roll-outs] ... a domain in which ASMedia excels,” Cheng said, adding that he believes that the strategic cooperation between the two firms would blossom into a long-term partnership benefiting both sides.
The deal has long been in the making, said ASMedia president and spokesman Lin Che-wei (林哲偉), who is also an independent member of WT’s board of directors.
“We have already worked together for many years, as WT is one of our sales agents,” Lin said, adding that the two firms entered closer talks over the past two months.
This could suggest that the share swap is aimed at weakening WPG Holdings Co’s (大聯大投資控股) grasp on WT.
WPG more than a month ago acquired an additional 17 percent stake in WT in a hostile takeover bid, leading WPG to claim nearly one-third of WT’s shares, but stopping short of a controlling stake in the company.
WT’s management team has been highly critical of WPG’s move, accusing it of monopolizing the local chip distribution market, and has taken the case to the Fair Trade Commission.
The share swap would result in a more than 20 percent dilution of WT’s shareholders’ stock, while ASMedia’s shareholders would see their ownership percentage slip more than 10 percent.
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