Sil­i­con­ware urges against selling shares to ASE

The China Post - - TAIWAN BUSINESS -

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.

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