SPIL strikes back at ASE in escalating takeover war
In the latest move to regain control in a hostile takeover, Siliconware Precision Industries Co. (SPIL,
) told media yesterday that the Taiwan Stock Exchange would become “a disaster zone” if a local court ruled in favor of its acquirer.
Advanced Semiconductor Engineering Co. (ASE, ) is petitioning for Taichung District Court to ban SPIL from holding an extraordinary shareholders’ meeting on Oct. 15. SPIL Chairman Bough Lin ( ) and John Hsuan ( ), an independent board director, decried ASE’s maneuver yesterday at a press conference on Sunday.
If the Taichung District Court rules in favor of the acquirer, other investors could use the precedent to interfere with companies’ lawful right to call shareholders’ meetings and the local bourse would become “a disaster zone,” Hsuan said.
SPIL will file a response to its acquirer’s petition in accordance with the law, so as to allow the court to make a wise and correct decision, he said.
Lin told reporters yesterday that ASE’s hostile takeover was set to become his life’s “biggest challenge” but that SPIL’s board had prepared a long-term defense strategy.
Lin said his interest was not in retaining his position as company chairman, emphasizing that as head of Phoenix Precision Technology Corp. ( ) he had bowed out in “the spirit of revolution.”
Instead, the effort to regain control from ASE was on behalf of SPIL’s shareholders and 23,000 employees, Lin said.
A pending share-swap deal with Hon Hai Precision Industry Co. (
) — which is on the agenda for the extraordinary shareholders’ meeting on Oct. 15 — would give SPIL stable returns and a synergis-
tic partnership, he said.
ASE currently holds a majority stake in its local rival SPIL, following a successful and unsolicited tender for a 25-percent stake worth NT$35 billion on Sept. 22.
The purchase posed a risk to SPIL’s management team, though ASE claimed that it was making only a “financial investment” and intended to stay out of company operations.
In a countermove to regain control, SPIL’s board announced a deal to swap shares with Hon Hai at a lower valuation.
If the proposal is approved at an extraordinary shareholders’ meeting on Oct. 15, the deal would give Hon Hai 6 million shares of SPIL, amounting to a 21-percent stake.
After the swap, ASE’s stake would be diluted to below 20 percent, leaving Hon Hai the biggest shareholder.
As ASE’s stake was confirmed only on Sept. 22, it is disqualified from attending the Oct. 15 meeting, which has a Sept. 15 registration deadline.
On Oct. 2, ASE petitioned the Taichung District Court to prevent SPIL from convening the meeting. ‘Defending Rights’: ASE An ASE spokesman said yesterday that he respects the opinions of members on SPIL’s board.
The preliminary injunction petition was aimed at defending a legal right of the largest shareholder, and has already entered the judicial process, he said.
The company would make no further statement.
Siliconware Precision Industries Co. ( SPIL, ) Chairman Bough Lin ( ) , right, and independent board director John Hsuan ( ) are shown at a press conference in Greater Taichung, yesterday.