PChome Online Inc’s (網路家庭) board of directors on Wednesday approved a private placement from Uni-President Enterprises Corp (統一企業), giving it a 30 percent stake in the e-commerce company.
In the deal, PChome would issue up to 61.69 million new common shares to Uni-President, which would become the largest institutional investor in the company, it said in a regulatory filing.
Uni-President, the nation’s largest food and beverage conglomerate, said in its regulatory filing on Wednesday that its board of directors had agreed to the private placement, which would allow it to secure two seats on PChome’s board.
Photo: CNA
The two companies did not disclose the total amount of the deal, which would be worth NT$1.96 billion (US$61.1 million) based on PChome’s closing share price of NT$31.75 on Wednesday.
The announcement helped push PChome’s share price up by the daily limit in Taipei trading yesterday, closing at NT$34.9, while Uni-President ended up 1.93 percent at NT$89.8, both outperforming the broader market’s 0.61 percent decline.
The private placement is expected to be completed after gaining shareholders’ approval in an extraordinary general meeting on Dec. 19, as well as regulatory approval, PChome said.
Unlike a public offering, an investor’s securities in a private placement are subject to a lockup period. Moreover, a private placement is considered to be more efficient and suitable for the company’s long-term planning while helping increase its working capital, PChome said.
Uni-President said the deal is part of its long-term investment plans. Last month, the company completed the acquisition of an 80 percent stake in Yahoo Taiwan Holdings Ltd’s (雅虎資訊) e-commerce business as it aims to increase sales from online stores and embrace the digital economy.
PChome has seen annual revenue drop in the past two years amid rising competition from rivals, and its cumulative revenue in the first three quarters of this year was down 8.55 percent year-on-year to NT$26.56 billion, the lowest level for the same period over the past six years.
The company has strengthened the sales of daily necessities, optimized its user interface that has been criticized for a long time, and reduced the number of loss-making subsidiaries after Alice Chang (張瑜珊) took over as chief executive officer in August 2022.
However, PChome’s performance remains weak compared with its peers such as Momo.com Inc (富邦媒體), which reported cumulative revenue of NT$79.09 billion in the first three quarters of this year, up 3.51 percent from a year earlier and marking the best result for the same period on record.
PChome reported NT$181.17 million in net losses for the first half of this year, with losses per share of NT$1.28. Prior to the September quarter, the company had posted 10 quarters of losses since the fourth quarter of 2021. In comparison, Momo.com reported NT$1.68 billion in net profit during the first half of the year, with earnings per share of NT$6.98.
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