Siliconware urges against selling shares to ASE
Siliconware Precision Industries Co. ( ), one of Taiwan’s leading integrated circuit packaging and testing services providers, has urged its shareholders not to sell their holdings to a rival before the company issues a recommendation on the rival’s tender offer.
In a statement Monday, Siliconware said its board of directors has set up a review committee consisting of three independent directors to evaluate the tender offer made by Advanced Semiconductor Engineering Inc. (ASE, ) on Friday after the stock market closed.
Siliconware said the committee will make a recommendation in seven days on ASE’s tender offer, which seeks to buy up to a 25 percent stake in Siliconware.
“The company strongly urges its shareholders to refrain from tendering any common shares or American depositary shares until the review committee has evaluated the unsolicited tender offer and published its recommendation and reasons for such a recommendation,” Siliconware said in the statement.
Catching the market off guard, ASE announced that it would buy up to a 25 percent stake in Siliconware by purchasing its common shares and American depositary receipts (ADRs) on the open market between Aug. 24 and Sept. 22.
The acquisition price has been set at NT$45 ( US$1.37), a 34.32 percent premium above Siliconware’s closing price of NT$33.50 on Friday.
After the announcement, shares of Siliconware rose 10 percent, the maximum daily increase allowed on the Taiwan Stock Exchange, on Monday.
As of 11:59 a.m. Tuesday, the stock had added an additional 9.23 percent to NT$40.25, and shares of ASE had risen 2.99 percent to NT$32.75, after a 6 percent rise seen a session earlier.
The proposed acquisition is expected to cost ASE NT$35 billion. ASE said that the acquisition is aimed at seeking opportunities to work with Siliconware to improve each side’s competitive edge at a time when competition in the global semiconductor industry is escalating.
ASE dismissed criticism that it was preparing for a hostile take- over, saying that it had no plans to intervene in Siliconware’s operations or take any seats on the company’s boards of directors and supervisors.
ASE is currently the world’s largest IC packaging and testing services provider, ahead of U.S.based Amkor Technology Inc. and Siliconware.
Right after the tender offer announcement by ASE, Siliconware said it had not been aware of ASE’s plan in advance.
In addition to the formation of the independent review committee, Siliconware said that it had retained JP Morgan Chase as its financial advisor and Simpson Thacher & Bartlett LLP as its legal counsel in the United States and Jones Day as its legal counsel in Taiwan.