SPIL strikes back at ASE in es­ca­lat­ing takeover war

The China Post - - LOCAL - BY ENRU LIN

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.

In­ten­si­fy­ing Takeover

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.

CNA

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.

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