ASE, SPIL, Hon Hai in Contest for Control

Silicon Precision Industries Co. (SPIL), the world’s third-largest semiconductor packaging and testing firm, failed in a bid to fend off a hostile takeover by rival Advanced Semiconductor Engineering Inc. (ASE)…

…after shareholders rejected management’s pitch for a tie-up with Hon Hai Precision Industries, Inc. ASE, the world’s largest player in the semiconductor packaging and testing sector, became SPIL’s largest shareholder by purchasing 25% of SPIL’s shares, worth a total of NT$35 billion (US$1.08 billion), but has vowed not to interfere in the company’s operations or seek restructuring that would lead to layoffs. Bough Lin, SPIL chairman, sought to limit ASE’s impact through a proposed tie up with Hon Hai that would have involved a share swap, with Hon Hai acquiring 21% of SPIL, and SPIL gaining 2.5% of Hon Hai. At an extraordinary shareholders meeting on October 15, SPIL’s management narrowly failed to gain the necessary majority shareholder approval for the alliance, with 46.57% voting in favor and 32.06% rejecting the proposal. Lin told the media that SPIL will continue to push for an alliance with Hon Hai.

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