Largan Precision Co (大立光) yesterday announced that it had acquired 20 million shares of Ability Optoelectronics Technology Co (先進光電) in a private placement, giving the company a 15.2 percent stake in its smaller rival.
Largan bought the shares at NT$29.92 each for a total of NT$598.4 million (US$21.08 million), it said in a filing with the Taiwan Stock Exchange.
The share purchase came after the two firms on Friday last week reached an out-of-court settlement over an intellectual property rights dispute.
Photo: David Chang, EPA-EFE
Largan first sued Ability in 2012 for allegedly stealing its trade secrets, and the two companies had been involved in a lengthy litigation battle ever since.
While the terms of the settlement were not revealed, it is widely assumed that the share purchase was part of it.
The Chinese-language Economic Daily News quoted Largan sources as saying that the leading handset camera lens maker has no desire to claim a seat on the Ability board or interfere with its rival’s daily operations.
"We believe Ability uses the private placement to compensate Largan by using stocks to repay debt, as part of the terms for the settlement," Capital Investment Management Corp (群益投顧) said in a note. "Largan should have no intention to enter the notebook computer camera lens and automotive camera lens markets with this private placement."
Largan’s purchase price of NT$29.92 per share represented a 41.22 percent discount on Ability’s closing price of NT$50.9 yesterday. Ability shares have jumped 10 percent — the legal maximum daily limit — every day since Friday.
Largan shares yesterday closed at NT$3,525, up 2.92 percent from the previous session and up 4.91 percent from Friday, stock exchange data showed.
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