Siliconware Precision Industries Co (SPIL, 矽品精密), the world’s third-largest chip packager and tester, yesterday failed to win shareholders’ support for its proposed strategic alliance with Hon Hai Precision Industry Co (鴻海精密), upsetting the management’s efforts to fend off a hostile takeover by by Advanced Semiconductor Engineering Inc (ASE, 日月光半導體).
ASE has become the biggest shareholder in SPIL after securing a 25 percent stake in the firm via a tender offer last month that was worth NT$35 billion (US$1.08 billion).
SPIL shareholders voted down a capital share expansion proposal, which would have allowed Hon Hai, a major assembler of Apple Inc’s iPhones, to become the biggest shareholder of SPIL by obtaining a 21 percent stake.
Photo: Tsai Shu-yuan, Taipei Times
Shareholders also voted against another proposal of offering 840 million new common shares to Hon Hai in a share swap deal.
After the meeting, SPIL chairman Bough Lin (林文伯) said the company would continue to push for an alliance with Hon Hai to get a bigger share of the rapidly growing system-in-a-package (SiP) market.
SiP is a technology that is used in Apple’s iPhones and smart watches.
Photo: Liao Yao-tung, Taipei Times
“We will come up with new approaches to offer SPIL shares [to Hon Hai],” Lin said. “We are confident that we can fend off our rival’s attack…. The fight will continue. There is still a long way to go.”
About 46.57 percent of SPIL shareholders attending the extraordinary meeting approved the two proposals, missing the threshold requirement of 50 percent, while 32.06 percent voted against the proposals.
Lin said the company’s management would continue to boost their holdings in SPIL. The board held a combined 5.54 percent stake, including Lin’s 2.92 percent, as of last month.
In its latest attempt to block ASE from taking control, SPIL yesterday said it has filed a civil lawsuit with a Kaohsiung district court against ASE, requesting the court to deny ASE’s right to register as a shareholder of SPIL.
SPIL said that ASE “has acted with a competitor’s mind” and attempted to intervene in the company’s business operations by opposing SPIL’s partnership with Hon Hai, according to a statement.
ASE has tried to control the company rather than considering its SPIL shares as a financial investment, as ASE has said a SPIL-Hon Hai deal would affected the allocation of SPIL’s board directors, SPIL said in the statement.
As a result, “ASE’s tender offer violated the Securities and Exchange Act (證券交易法), Fair Trade Act (公平交易法) and other related regulations and breaches public order, and thus should be invalid,” SPIL said.
Many SPIL employees yesterday voiced their fear and anger outside the shareholders’ meeting venue in Taichung, saying that ASE would hurt their right to work, even though ASE has repeatedly promised to protect employees’ benefits and not to intervene in SPIL’s operations.
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