Far EasTone Telecommunications Co (遠傳電信) yesterday did not extend an agreement with Asia Pacific Telecom Co (亞太電信) to push forward a merger-and-acquisition deal, an unexpected move prompting speculation about potential differences between the parties over the content of the agreement.
Based on the agreement, the two parties are eligible to extend the expiration to Aug. 31, after an extension on May 1.
Far EasTone yesterday said that it “did not intend to extend the agreement.”
“We will cautiously evaluate issues regarding the merger based on the spirit of the original agreement,” the telecom said in a statement.
Those issues include when the Fair Trade Commission (FTC) would approve the deal, and any condition the agency would impose on the approval, Far EasTone said. The FTC has put off the review to Sept. 30, given the complexity of the merger.
The National Communications Commission approved the NT$24.7 billion (US$793.3 million) acquisition conditionally in January. Taiwan Mobile Co’s (台灣大哥大) approval of Taiwan Star Telecom Corp (台灣之星) was also cleared based on several conditions.
Taiwan Mobile slashed about 72 percent, or NT$8.5 billion, of its offering to absorb financially strapped Taiwan Star to NT$19.7 billion from a previously proposed NT$28.2 billion through share swaps. That prompted speculation that Far EasTone could follow suit, seeking to lower the price to merge with Asia Pacific Telecom.
Far EasTone said earlier this month that it expected to complete the merger with Asia Pacific Telecom as early as the fourth quarter of this year, saying that it would create NT$3 billion in synergy benefits within one year of the merger.
Far EasTone originally expected that 70 percent to 80 percent of the base station consolidation would be finished in the fourth quarter.
Far EasTone Telecommunications’ share price rose by 0.38 percent to NT$78.6 in Taipei trading yesterday, while Asia Pacific Telecom’s share price increased by 0.15 percent to NT$6.69, Taiwan Stock Exchange data showed.
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