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Hon Hai to continue to push for stock swap with Siliconware

Hon Hai to continue to push for stock swap with Siliconware

Taipei, Sept. 24 (CNA) Hon Hai Precision Industry Co. (??), the world's largest contract electronics maker, has decided to continue to push for a strategic alliance with IC packaging and testing services provider Siliconware Precision Industries Co. (??) through a stock swap. Hon Hai made the comments late Wednesday evening after Advanced Semiconductor Engineering Inc. (ASE, ???), which has completed a tender offer to acquire a 24.99 percent stake in Siliconware, voiced its opposition to the stock deal between Hon Hai and Siliconware. ASE launched a tender offer Aug. 24 to buy an up-to 25 percent stake in Siliconware. To counter ASE's acquisition, Siliconware, which had urged shareholders not to sell shares to ASE, announced Aug. 28 that it would conduct a stock swap with Hon Hai by issuing new shares. The tender offer was carried out Sept. 22, with ASE buying the amount of Siliconware shares it had targeted. Under the stock swap deal, 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. If the stock swap deal goes through, ASE's stake in Siliconware will be diluted to a level below 20 percent and Hon Hai will no doubt seize the title of Siliconware's largest shareholder. Siliconware is scheduled to hold a special general meeting Oct. 15 to secure approval from shareholders on the strategic alliance deal with Hon Hai. ASE Chairman Jason Chang (???) visited Siliconware Chairman Bough Lin (???) Wednesday to express his company's opposition to the stock swap deal with Hon Hai, saying that the issuance of new shares is expected to dilute earnings per share. Chang said he is not against a strategic alliance between Hon Hai and Siliconware but is opposed to a stock swap. Market analysts said that ASE wants to keep its status as the largest shareholder of Siliconware. After launching the tender offer, ASE had repeatedly said that it would not intervene in Siliconware's operations if the acquisition was completed, and emphasized that the buy-in deal was simply for financial investment purposes. For its part, Siliconware has said that the tender offer was paving the way for a hostile takeover in the future, so the company has aimed to set up a strategic alliance with Hon Hai in a bid to prevent ASE from keeping its title as the largest shareholder. ASE ranks as the world's largest IC packaging and testing services provider, followed by U.S.-based Amkor Technology Inc. (By Jalen Chung and Frances Huang)


Updated : 2021-01-21 13:09 GMT+08:00