Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), the world’s biggest chip packager and tester, yesterday said it bought a 5 percent stake of Siliconware Precision Industries Inc (SPIL, 矽品精密) on the open market, meeting the minimum requirement in its NT$35 billion (US$1.07 billion) bid to take over the local rival.
The progress boosted ASE’s confidence of acquiring SPIL, with the company saying it will continue to make cash purchases of SPIL stock at NT$45 per share until Tuesday as planned, according to an ASE statement.
The Kaohsiung-based company aims to buy as many as 770 million SPIL shares, or a 25 percent stake, which will make ASE its second-largest stakeholder.
Photo: Liu Hsin-de, Taipei Times
“As the minimum condition has been satisfied, ASE will pay NT$45 per common share and NT$225 per ADR [American depositary receipt] payable in the equivalent amount of US dollars on or before Sept. 30,” ASE said in the statement.
As of yesterday, ASE had bought about 156.55 million common SPIL shares, including its US depositary receipts, surpassing the tender offer’s threshold of 155.82 million shares, the statement said.
In a struggle to defend its ownership, SPIL again suggested that investors not tender their shares, or withdraw tenders made to ASE on grounds that NT$45 per share is unreasonable.
The offer price represents a mere 6.76 percent premium on SPIL’s closing price of NT$42.15 on Thursday, SPIL said in a note to shareholders yesterday.
SPIL, the world’s No. 3 chip packager, reiterated that a SPIL-ASE tie-up would not create much synergy, as 85 percent of its customers overlap with ASE’s.
The acquisition will cause order losses for SPIL, as customers will allocate some orders to a third supplier rather than put all their eggs in one basket, the note said.
In a bid to block the acquisition, SPIL has agreed to form a strategic alliance with Apple Inc’s major iPhone and iPad assembler, Hon Hai Precision Industry Co Ltd (鴻海精密), via a share swap.
The proposed alliance with Hon Hai will create greater synergy in terms of customers and technology, SPIL said.
The firm’s board of directors recommended that shareholders support the strategic alliance with Hon Hai, which is to be discussed at an extraordinary shareholders’ meeting on Oct. 15.
SPIL employees also opposed ASE’s bid.
A group of SPIL employees rallied in front of the Ministry of Labor building in Taipei, saying the deal puts their jobs at risk, citing ASE’s track record of layoffs following merger-and-acquisition deals.
The employees asked the ministry not to sell its SPIL holdings.
The ministry has about a 5.8 percent stake in SPIL via three public pension funds, SPIL records showed.
The ministry said it would evaluate whether the funds would remove SPIL shares from their portfolios due to ASE’s bid, as the funds seek stable, long-term returns.
Separately, ASE urged the ministry to remain neutral over its offer.
ASE said it will not intervene in the operation of SPIL, as the takeover would be an investment.
ASE will by no means harm the interests of SPIL employees, it said.
The company added that it has expanded its local workforce from 25,274 to 35,686 over the past 10 years.
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