ASE proposes acquisition of SPIL
Advanced Semiconductor Engineering has announced that its board of directors has approved and submitted a proposal to Siliconware Precision Industries to acquire all SPIL shares for cash, to be effected through an agreed statutory share exchange transaction under Taiwan law between ASE and SPIL on customary terms and conditions (including closing conditions) (please see below for the full text of the letter that ASE sent to the board of directors of SPIL).
- The terms and conditions of our Proposal are as follows:
- Price: NT$55 per common share (or NT$275 per American depositary share).
- Acquisition amount and legal entity name: all shares of SPIL not otherwise owned by ASE. If the transaction is consummated, SPIL will become a wholly-owned subsidiary of ASE. ASE will maintain SPIL's separate legal entity status and retain SPIL's legal entity name.
- All directors and management of SPIL will be retained and their current compensation and benefits maintained.
- SPIL's current employee policies will be observed and all SPIL employees will be retained to ensure the protection of their labour rights.
- SPIL must terminate or cancel the Tsinghua Deal (as defined below) in accordance with its terms or applicable laws (and terminate any other transaction that will dilute SPIL's shares or other similar transactions).
ASE's investment in SPIL was based on our sincere belief in the need for Taiwan's semiconductor packaging and testing industry players to actively seek opportunities for cooperation and resource consolidation to maintain and further improve the competitive strength of Taiwan's semiconductor packaging and testing industry in the face of intensified global competition and emerging competitors. Therefore, we hoped that our investment in SPIL would have promoted the cooperation between both companies and set an excellent example in Taiwan for productive cooperation between two exemplary companies in the face of intense competition.
However, from the time we launched the tender offer for shares of SPIL, we have noted the hostility of SPIL's management towards our investment and its refusal to reasonably consider the possibility of cooperating with ASE. We were chagrined to learn that on December 11, 2015 the board of directors of SPIL decided to enter into a share placement agreement with Tsinghua Unigroup Ltd. ("Tsinghua"), pursuant to which SPIL will issue 1,033 million common shares to a subsidiary of Tsinghua for NT$55 per share (the "Tsinghua Deal"), contemplating a defensive and highly dilutive transaction that brings no cash to its shareholders.
As ASE is deeply committed both to preserving and creating shareholder value at SPIL, and in order to protect our investment in SPIL, we are left with no choice but submit the Proposal to SPIL for the parties to enter into an agreed statutory share exchange agreement pursuant to Taiwan law on customary terms and conditions (including closing conditions), under which we will acquire 100 percent equity interest in SPIL for cash.
We have asked that SPIL review our Proposal and send us a written response no later than December 21, 2015 to confirm whether SPIL is willing to discuss as soon as possible a 100 percent share exchange transaction in accordance with our Proposal. If SPIL agrees, the contemplated 100 percent share exchange transaction will be implemented pursuant to the Taiwan Mergers and Acquisitions Act and applicable regulations, and will be subject to the parties' execution and delivery of a share exchange agreement, approval from both ASE's and SPIL's shareholders meetings, clearance from the relevant regulatory authorities and other customary closing conditions.
We believe that our Proposal provides an attractive and immediate cash value to SPIL shareholders while preserving the rights and entitlements of SPIL's management and employees.
