TAIPEI, Taiwan, Dec. 14, 2015 /PRNewswire/ -- Advanced
Semiconductor Engineering, Inc. (TAIEX stock code: 2311; NYSE: ASX)
("ASE" or "we") today announced that its board of
directors has approved and submitted a proposal (the
"Proposal") to Siliconware Precision Industries Co., Ltd.
("SPIL") 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 labor
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% 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% share exchange transaction in accordance with
our Proposal. If SPIL agrees, the contemplated 100% 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.
The key highlights of our Proposal include:
- Premium valuation: Our Proposal represents
a 20.88% premium over the closing price of SPIL common shares on
December 11, 2015 and a 27.91%
premium over the average closing price of common shares of SPIL for
the 60-business day period ending December
11, 2015.
- Cash value for SPIL shareholders: The
Tsinghua Deal not only does not provide any cash to SPIL's
shareholders, but will also significantly dilute the equity
interests of SPIL's shareholders. (If SPIL issues 1,033 million new
shares to Tsinghua, the additional shares issued will amount to
approximately 33% of the current pre-money total outstanding share
capital of SPIL.) In contrast, our Proposal is for an all cash
offer that would provide immediate and certain cash value to SPIL's
shareholders.
- Beneficial for SPIL management and
employees: ASE intends to continue to be subject to
all previous personnel regulations, employee compensation and
employee benefits in order to protect the rights and interests of
employees.
We are deeply committed both to preserving and creating
shareholder value at SPIL and we believe that our Proposal provides
compelling value to SPIL shareholders.
***
Below is the full text of the letter that ASE sent to the board
of directors of SPIL today.
December 14, 2015
The Board of Directors
Siliconware Precision Industries Co., Ltd.
No. 123, Section 3, Da Fong Rd.
Tanzi District, Taichung, Taiwan,
R.O.C.
To All Directors of SPIL:
On October 1, 2015, Advanced
Semiconductor Engineering, Inc. ("ASE," "we" or
"the Company") acquired 779,000,000 common shares
("Common Shares"), including those represented by American
depositary shares ("ADSs"), of Siliconware Precision
Industries Co., Ltd. ("SPIL") through concurrent tender
offers in Taiwan and in
the United States (the "Tender
Offer"), thereby becoming a shareholder of SPIL, holding
approximately 24.99% of the issued and outstanding share
capital of SPIL.
ASE and SPIL were both established in 1984. Over the past 30
years, ASE and SPIL worked tirelessly to build the foundation of
Taiwan's semiconductor industry.
Both ASE and SPIL have experienced the numerous ups and downs of
Taiwan's semiconductor industry,
faced challenges from around the world and prevailed over
difficulties to establish Taiwan's
leading position in the global semiconductor industry. These events
flashed by and it seems as if the huge changes in the industry only
happened yesterday. Only those who have participated can truly
appreciate this achievement. In this age of intensified global
competition and emerging competitors, we hope that with all our
efforts, and with the support and assistance from Taiwan's government, Taiwan will continue to be a leading force in
the intensely competitive environment of the global semiconductor
industry.
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 greatly value our
investment in SPIL and hoped that this investment would have
promoted the cooperation between both companies, as well as 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 we have
noted the hostility of SPIL's management towards our investment and
its refusal to reasonably consider the possibility of cooperating
with ASE. For example:
- SPIL attempted to implement a cashless and highly dilutive
share swap with a third party at an extremely low implied price – a
maneuver that was not approved at SPIL's shareholders'
meeting;
- SPIL commenced baseless litigation against ASE, attempting to
invalidate the Tender Offer and alleging that ASE does not have the
right to be recorded in SPIL's shareholder register for the shares
it acquired in the Tender Offer for consideration of approximately
NT$35.2 billion, and publicly denied
that ASE is a lawful shareholder of SPIL;
- SPIL has on multiple occasions questioned in the harshest terms
ASE's good faith to seek avenues of cooperation;
- The financial press has reported repeatedly that SPIL is
putting in place defensive measures to disadvantage ASE, SPIL's
largest shareholder; and
- SPIL's employees have repeatedly and publicly made unfounded
speculations about ASE and the lawful Tender Offer, even organizing
a 3,000-person protest intended to generate public hostility
against us; SPIL's management has at no point refuted such actions
or statements made by its employees.
Even so, we have not maliciously criticized SPIL and its
management, but repeatedly sought dialogue with SPIL on an equal
and mutually beneficial basis. Unfortunately, we have failed to
reach any consensus. We were further chagrined to learn that on
December 11, 2015 the board of
directors of SPIL decided to enter into a share subscription
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 to propose to enter into an
agreed statutory share exchange agreement between ASE and SPIL on
customary terms and conditions (including closing conditions),
under which we will acquire 100% equity interest in SPIL for cash.
The terms and conditions of our proposal (the "ASE Acquisition
Proposal") are as follows:
- Price: NT$55 per Common Share (or
NT$275 per ADS).
- 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 labor
rights.
- SPIL must terminate or cancel the Tsinghua Deal in accordance
with its terms or applicable laws (and terminate any other
transaction that will dilute SPIL's shares or other similar
transactions).
We urge that SPIL review the ASE Acquisition Proposal and send
us a written response no later than December
21, 2015 confirming whether SPIL is willing to discuss as
soon as possible a 100% share exchange transaction in accordance
with the aforementioned ASE Acquisition Proposal. If SPIL agrees
with the ASE Acquisition Proposal, the contemplated 100% 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 at both ASE's and SPIL's shareholders
meetings, clearance from the relevant regulatory authorities and
other customary closing conditions.
Unlike the Tsinghua Deal, the ASE Acquisition Proposal will
bring a cash value to all SPIL shareholders. The Tsinghua Deal not
only does not provide any cash to SPIL's shareholders, but will
also significantly dilute the equity interests of SPIL's
shareholders. (If SPIL issues 1,033 million new shares to
Tsinghua, the additional shares issued will amount to approximately
33% of the current pre-money total outstanding share capital of
SPIL.)
We once again sincerely urge that all members of the board of
directors of SPIL uphold their fiduciary duties, and, keeping in
mind the interests of all of SPIL's shareholders, carefully review
the details and conditions of the ASE Acquisition Proposal. We
trust that the board of directors of SPIL will take a broader
perspective and seriously consider the future of Taiwan's semiconductor packaging and testing
industry, taking into account both companies' endeavors in
Taiwan's semiconductor industry
for over 30 years, when considering the ASE Acquisition
Proposal.
Advanced Semiconductor Engineering, Inc.
***
Additional Information:
This communication does not constitute an offer to buy or
solicitation of any offer to sell securities. This communication
relates to a proposal which ASE has made for a business combination
transaction with SPIL. In furtherance of this proposal and subject
to future developments, ASE and/or SPIL may file one or more
registration statements, tender offer statements, prospectuses,
proxy statements or other documents with the SEC. This
communication is not a substitute for any registration statement,
prospectus, proxy statement or other document ASE and/or SPIL may
file with the SEC in connection with the proposed transaction.
INVESTORS AND SECURITY HOLDERS OF ASE AND SPIL ARE URGED TO READ
CAREFULLY THE REGISTRATION STATEMENT(S), TENDER OFFER STATEMENT(S),
PROSPECTUS(ES), PROXY STATEMENT(S) AND OTHER DOCUMENTS FILED WITH
THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT ASE, SPIL AND THE PROPOSED TRANSACTION.
Investors and security holders may obtain free copies of these
documents (when they are available) and other related documents
filed with the SEC at the SEC's web site at www.sec.gov.
Safe Harbor Notice:
This press release contains "forward-looking statements" within
the meaning of Section 27A of the United States Securities Act of
1933, as amended, and Section 21E of the United States Securities
Exchange Act of 1934, as amended, including statements regarding
our future results of operations and business prospects. Although
these forward-looking statements, which may include statements
regarding our future results of operations, financial condition or
business prospects, are based on our own information and
information from other sources we believe to be reliable, you
should not place undue reliance on these forward-looking
statements, which apply only as of the date of this press release.
The words "anticipate," "believe," "estimate," "expect," "intend,"
"plan" and similar expressions, as they relate to us, are intended
to identify these forward-looking statements in this press release.
Our actual results of operations, financial condition or business
prospects may differ materially from those expressed or implied in
these forward-looking statements for a variety of reasons,
including risks associated with cyclicality and market conditions
in the semiconductor or electronic industry; changes in our
regulatory environment, including our ability to comply with new or
stricter environmental regulations and to resolve environmental
liabilities; demand for the outsourced semiconductor packaging,
testing and electronic manufacturing services we offer and for such
outsourced services generally; the highly competitive semiconductor
or manufacturing industry we are involved in; our ability to
introduce new technologies in order to remain competitive;
international business activities; our business strategy; our
future expansion plans and capital expenditures; the strained
relationship between the Republic of
China and the People's Republic of
China; general economic and political conditions; the recent
global economic crisis; possible disruptions in commercial
activities caused by natural or human-induced disasters;
fluctuations in foreign currency exchange rates; and other factors.
For a discussion of these risks and other factors, please see the
documents we file from time to time with the Securities and
Exchange Commission, including our 2014 Annual Report on Form 20-F
filed on March 18, 2015.
Investor Relations Contact:
Iris Wu, Manager
irissh_wu@aseglobal.com
Tel: +886.2.6636.5678
http://www.aseglobal.com
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SOURCE Advanced Semiconductor Engineering, Inc.