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ASE, Siliconware shares down amid skepticism over hookup

ASE, Siliconware shares down amid skepticism over hookup

Taipei, Sept. 23 (CNA) Shares of Advanced Semiconductor Engineering Inc. (ASE, ???) and rival Siliconware Precision Industries Co. (??) moved lower Wednesday as investors questioned whether ASE's purchase of a stake in its rival will benefit either company, dealers said. The two stocks also came under pressure after their American depositary receipts (ADRs) tumbled on Wall Street overnight following ASE's announcement that it had accomplished its goal of acquiring up to a 25 percent stake in Siliconware in a tender offer, they said. As of 11:51 a.m., ASE had fallen 3.06 percent to NT$34.80 (US$1.06), while Siliconware had shed 4.61 percent to NT$39.30. The weighted index on the Taiwan Stock Exchange was down 2.01 percent at 8,198.13. In a statement released Tuesday, ASE said it acquired a 24.99 percent stake in Siliconware through a tender offer from Aug. 24 to Sept. 22. ASE bought Siliconware common shares and ADRs on the open market during the period to become the company's largest shareholder, at least for now. ASE set the acquisition price at NT$45, which represented a 34.32 percent premium over Siliconware's closing price on Aug. 21. Analysts said many foreign institutional investors sold their holdings in the stock, taking advantage of the high premium ASE had offered. During the tender offer period, foreign institutional investors sold more than 134 million Siliconware shares, while local insurance companies, such as Shin Kong Life Insurance Co. (????) and China Life Insurance Co. (??) also showed support, analysts said. "After the tender offer was announced, shares of Siliconware soared because of the support of the high premium resulting from the acquisition price. Now, the stock is seeking its fair market price after the acquisition," Hua Nan Securities analyst Kevin Su said. Siliconware shares rose more than 20 percent between Aug. 24 and Sept. 22. "Investors are now looking to see if the acquisition will deliver any synergies between the two companies," Su said. Amid such concerns, Siliconware's ADRs fell 2.81 percent and ASE's fell 2.21 percent in the U.S. market overnight. Before the tender offer was completed, Siliconware had repeatedly urged its shareholders not to sell shares to ASE, saying the deal was paving the way for a hostile takeover. But ASE said the tender offer was simply a financial investment, and it has promised not to intervene in Siliconware's operations. To counter ASE's tender offer, Siliconware announced on Aug. 28 that it had agreed with Hon Hai Precision Industry Co. (??), the world's largest contract electronics maker, to stage a stock swap through the issuance of new shares. Under the agreement, Hon Hai is expected to hold a 21.24 percent stake in Siliconware to become the latter's largest shareholder, and Siliconware will hold a 2.2 percent stake in Hon Hai on a diluted basis. Siliconware has scheduled a special general meeting for Oct. 15 to secure approval from shareholders for the stock swap. If it is approved, ASE's stake in Siliconware will be diluted to around 19 percent to become the company's second largest shareholder after Hon Hai. "The cautious sentiment toward Siliconware shares also reflected concerns over whether the stock swap deal will go through and how it will affect the IC firm's future operations," Su said. (By Jalen Chung and Frances Huang)


Updated : 2021-06-13 20:21 GMT+08:00