STATS ChipPac offered $1.6B for majority stake

By Colleen Taylor -- Electronic News, 3/1/2007

Investment firm Temasek Holdings Ltd., a wholly owned subsidiary of Singapore Technologies Semiconductors Pte Ltd. (STS), has launched a voluntary conditional cash offer totaling up to $1.6 billion for the remaining shares in Singapore-based backend services company STATS ChipPAC Ltd. that STS does not already own. STS currently has an approximate 35.6 percent stake in STATS ChipPAC.

Today’s offer is just the latest evidence of private equity's growing interest in the tech realm. For months analysts have been predicting more and more private equity buyouts in the industry, due in part to increased regulations that make IPOs less desirable to companies.

The offer price is $1.15 (1.75 Singapore dollars) for each share and represents a 18.2 percent premium over Wednesday's closing price of STATS ChipPAC's shares, a 40.5 percent premium over STATS ChipPAC's average closing share price during the past three months, and a 55.1 percent premium over STATS ChipPAC's average closing share price during the past six months.

STS said that the offer will be conditioned upon whether it is given control of 50 percent of the total outstanding shares. If shares tendered into the offer result in STS owning at least 90 percent of outstanding shares in STATS ChipPAC, STS said it intends to offer a higher purchase price of $1.23 (1.88 Singapore dollars) per share to all shareholders who accept the offer, regardless of when their shares are tendered.

The deal would also include an offer by STS for STATS ChipPAC's outstanding $115 million convertible notes and $150 million 2.5 percent convertible notes, both due in 2008. STS said the offer for the convertible notes is conditioned on the offer for the shares becoming unconditional in all respects.