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Carlyle group bids $5.5 bln for Taiwan's ASE
Fri Nov 24, 2006 6:51 AM ET


NEW YORK/TAIPEI (Reuters) - A private equity consortium led by The Carlyle Group plans a $5.5 billion bid for the world's top chip packaging firm, Advanced Semiconductor Engineering Inc. (ASE), Taiwan-based ASE said on Friday.

At T$39 a share, the potential offer represents a 10 percent premium to ASE's Friday closing price of T$35.5 a share, and values the firm at about T$179 billion ($5.46 billion), according to Reuters data.

Private equity shops are looking for domestic technology firms, which generate steady cash flow, have a long-term upward growth trend, and have multiple business units that can be listed or sold, analysts said.

Earlier this week, U.S.-based Jabil Circuit Inc., a maker of electronic components for mobile phones and computers, said it planned to buy Taiwan's Green Point Enterprises Co. for around $881 million -- at around a 3.8 percent premium.

ASE, which encases silicon chips in plastic packages so they can be connected to circuit boards, said the bid consortium already has ASE Chief Executive Jason Chang on board with the deal.

Chang and his affiliated holding company, ASE Enterprises Ltd., hold about 18.4 percent of ASE's shares, but ASE said it had not yet approved the bid and no formal offer had been made.

"Discussions between ASE and the consortium have not been completed, and there can be no assurance that an offer will ultimately be made by the consortium or what the ultimate terms of such an offer would be," said a statement from ASE released in New York.

ASE reported last month its third-quarter profit more than doubled on recovering chip demand, but forecast weaker sales and falling profit margins in the fourth quarter.

The company counts ATI Technologies, Freescale Semiconductor Inc. and Qualcomm Inc. as its major clients.

Its 2006 net profit is forecast to increase by a quarter to T$18.28 trillion, according to Reuters Estimates.

Its forecast earnings per share is T$3.93, making the bid about 10 times forecast earnings, similar to that of smaller local rival Siliconware Precision Industries Ltd.

(Additional reporting by Jean Yoon and Ian Geoghegan in Singapore)

http://today.reuters.com/news/articlenews.aspx?type=businessNews&storyID=2006-11-24T115045Z_01_SP121957_RTRUKOC_0_US-ASE-CARLYLE.xml