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United Micro shares rise on plans for payout, report of buyout

United Micro shares rise on plans for payout, report of buyout

Shares of United Microelectronics Corp., the world's second-largest custom-chip maker, rose for a second day on the company's plans to give back US$1.7 billion to shareholders and a report it is in talks with buyout firms.
The stock gained 3.1 percent to NT$21.6 at the close of trading in Taipei, after rising as much as 7 percent, the daily limit. The island's Taiex index declined 0.2 percent.
United Microelectronics denied a report in the Commercial Times yesterday that the company is negotiating its sale to buyout funds including Texas Pacific Group, Kohlberg Kravis Roberts & Co. and Silver Lake Partners. The Hsinchu, Taiwan-based company said on Tuesday it will give back US$1.7 billion in cash to stockholders as part of a plan to reduce capital by 30 percent.
"In the short term, investors will rush to buy UMC shares because of the capital reduction; UMC also has non-operating investment and is a possible acquisition target," said Barro Liao, who helps manage US$2.7 billion at PCA Securities Investment Trust Co. in Taipei, excluding UMC shares. "In the long run, the capital reduction will constrain UMC's competitiveness" as it will have less funds for expansion.
The company's shares for the six months before the announcement, rising only 10.3 percent.
"We haven't engaged with anyone," United Microelectronics spokesman Alex Hinnawi said by phone. He described the report as "speculation" and declined to elaborate.


Updated : 2020-12-05 11:28 GMT+08:00