TAIPEI--Siliconware Precision Industries Co. (矽品) has publicly opposed an offer by Advanced Semiconductor Engineering Inc. (ASE, 日月光) to take a larger stake in the company, describing it as a "hostile" move.
Taiwan-based Siliconware made its opposition known late Tuesday evening after ASE announced a tender offer to acquire an additional 24.71 percent stake in Siliconware that would bring its total holdings in the company to 49.71 percent.
It was the second tender offer for Siliconware shares proposed by ASE in four months. ASE announced the first tender offer in August and completed an acquisition of a 25 percent stake in Siliconware on Oct. 1 to become the company's largest shareholder.
Taiwan-based ASE is the world's largest integrated circuit packaging and testing services provider, ahead of U.S.-based Amkor Technology Inc. and Siliconware.
ASE said the second tender offer, scheduled to start from Dec.29 and run through Feb. 26, 2016, aims to acquire up to 770 million Siliconware shares at NT$55 (US$1.67), for a total investment of NT$42.35 billion.
Siliconware said ASE failed to provide any good reason for acquiring the additional stake, suggesting that the tender offer is paving the way for a hostile takeover that could undermine the market's order.
Siliconware worried that because it and ASE are the two biggest IC packaging and testing firms in Taiwan, a hostile takeover could lead customers who are worried about the merger's affect on market competition to shift their orders to a third company.
Under such unfavorable circumstances, ASE's move will have an adverse impact on Taiwan's industrial development and business ethics, the company argued.
Second Tender Offer
At a news conference held on Tuesday, ASE said that if the second tender offer is completed to increase its stake in Siliconware to 49.71 percent, it will push to acquire Siliconware's remaining shares in the future and take the company private.
Siliconware urged investors who sold their Siliconware shares to ASE in the first tender offer to ask for compensation from ASE, because the latest offer is 22 percent higher than the NT$45 price set for the first offer completed less than three months ago.
China's Tsinghua Unigroup
Siliconware said it was not clear why ASE proposed a NT$55 price in the second tender offer, but that was the same price per share at which China's Tsinghua Unigroup (紫光集團), which is backed by the Chinese government, proposed to buy a 25 percent stake in Siliconware through a private placement earlier this month.
Before announcing its second tender offer, ASE proposed on Dec. 14 to acquire the remaining 75 percent stake in Siliconware and asked Siliconware to reply by Dec. 21.
Siliconware responded, however, that it would not respond to the ASE proposal until Dec. 28, when a board meeting was scheduled to be held.
The Dec. 14 proposal came just three days after the planned tie-up between Tsinghua Unigroup and Siliconware was announced.
That move, which Siliconware seemed to favor, would dilute ASE's stake in its local rival to 18.7 percent and allow the Chinese company to replace ASE as Siliconware's major shareholder.
The latest tender offer by ASE indicated its reluctance to wait until Dec. 28 for a reply from Siliconware.
Cited the Dec. 14 acquisition proposal and ASE's latest tender offer, Siliconware described the suitor's decision-making process as very unsteady, and said such capricious moves were unlikely to lay a good foundation for a dialogue between the two companies.
In the first trading session after the new tender offer was announced, shares of Siliconware rose 4.4 percent to close at NT$52.50, and shares of ASE gained 5.2 percent to end at NT$38.50 in Taipei on Wednesday.