The Taipei District Court yesterday approved prosecutors’ requests to detain XPEC Entertainment Inc (樂陞科技) chairman Aaron Hsu (許金龍) over his alleged involvement in a Japanese firm’s failed tender offer for a stake in the computer game maker, which resulted in massive losses for investors.
The court, which had turned down three previous requests by prosecutors, reversed its decision after new evidence was presented.
No details about the new evidence was available, as the case is under investigation.
Photo: Fang Pin-chao, Taipei Times
The failed deal was the first settlement default in a tender offer in Taiwan’s equity market.
In late May, Bai Chi Gan Tou Digital Entertainment Co (百尺竿頭) announced plans to acquire 38 million shares, or 25.17 percent of XPEC, at NT$128 per share, almost 22 percent more than its share price at the time, saying the Japanese firm was upbeat about the Taiwanese firm’s prospects. The acquisition was valued at NT$4.86 billion (US$154.9 million at current exchange rates).
The bid prompted many retail investors to pick up XPEC shares on expectations that Bai Chi would spend NT$128 per share to buy their XPEC holdings later.
In June, the company’s share price surpassed NT$110.
However, speculation emerged on Aug. 19 that Bai Chi would delay the acquisition, which started to push XPEC shares lower.
In late August, the Japanese firm requested an extension of the deadline for making a payment on the acquisition.
On Aug. 30, the Japanese firm announced it had decided to walk away from the deal, resulting in a settlement default.
The default sent XPEC’s shares tumbling to a low of NT$70.20 on the over-the-counter market on Aug. 31.
The failed acquisition wiped NT$10 billion from XPEC’s market capitalization.
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