SPIL rejects ASE takeover bid, announces deal with Hon Hai
Hon Hai Precision Industry Co. ( ) and Siliconware Precision Industries Co. (SPIL, ) yesterday announced a strategic alliance via share swap in a bid to reject Advanced Semiconductor Engineering Inc.’s (ASE, ) hostile takeover of SPIL.
SPIL said it had concerns over ASE’s bid to acquire a 25-percent stake in SPIL, and called on SPIL shareholders not to accept ASE’s offer.
On Aug. 21, ASE revealed its intention to acquire SPIL common share and American Depositary Receipts (ADR) at the price of NT$45 per share.
Under the Regulations Governing Public Tender Offers for Securities of Public Companies, two meetings were held by the board of SPIL and a review committee separately to deliberate ASE’s takeover.
SPIL later concluded that ASE offered a mere 0.29- percent price premium, considering the share’s average trading price of NT$44.87 over the past 90 business days.
The cash consideration offered by ASE is regarded “inadequate” from a financial point of view, based on the opinion of J.P. Morgan Securities, which was chartered by SPIL to review ASE’s acquisition.
Also, based on the Ding Shuo Certified Public Accountants’ report, the reasonable price range is between NT$ 48.91 and NT$60.58 per share, and NT$244.55 and NT$302.0 for the ADR, the semiconductor company said.
Therefore, ASE’s offers of NT$45 per share and NT$225 per ADR fall below the reasonable price range, SPIL said.
SPIL also criticized AOE for launching a hostile takeover, saying that ASE never communicated the tender vance.
Embracing with Hon Hai Instead
Hon Hai and SPIL held a joint press conference late Friday afternoon to declare the partnership, which gives Hon Hai a 21.24-percent stake in SPIL to make it the largest shareholder. SPIL will own a 2.2-percent stake in Hon Hai after the share swap.
In this deal, one Hon Hai share will be exchanged for 2.34 SPIL shares, according to SPIL Chairman Bough Lin ( ).
The semiconductor company and contract manufacturer will collaborate on sales and technical know-how to provide ideal integrated solutions, according to the contract signed yesterday.
To meet future demand for smartphones, wearable devices, the Internet of Things and to offer cutting-edge products, SPIL will put IC wire bonding and semiconductor packaging technologies on the table, while Hon Hai will offer SMT, flexible printed circuit and module assembly technical know-how.
The two companies will also work closely on system in package (SiP) technologies and explore opportunities in the market together.
Siliconware Precision Industries Co. Chairman Bough Lin ( ), left, shakes hands with a Hon Hai Precision Industry Co. ( ) executive to declare the two companies’ strategic alliance via a share swap deal, in Taipei, yesterday.