Private equity firm falls short in attempted STATS ChipPAC takeover

By Colleen Taylor, Contributing Editor -- 5/18/2007

In a humbling event for the increasingly formidable private equity realm, Singaporean investment fund powerhouse Temasek Holdings' wholly-owned subsidiary, Singapore Technologies Semiconductors Pte. Ltd. (STSPL), has failed to complete its attempted buyout of test and assembly provider STATS ChipPAC Ltd.

The investment firm's $1.6 billion cash offer, which aimed for all the remaining shares in STATS ChipPAC along with its outstanding $265 million in convertible notes, closed today. STSPL, which had before today owned about 35.6 percent of STATS ChipPAC, fell short of its ultimate takeover aspirations: the firm walked away from today's transaction with just another 46.4 percent of the company's outstanding shares and $134.5 million in convertible notes.  

Today's transactions leave STSPL with a majority stake of 83.1 percent of the company, falling short of the 90 percent stake needed to take STATS ChipPAC completely private by delisting it from the Singapore Exchange and the Nasdaq.

According to STATS ChipPAC, the takeover bid was ultimately halted by the refusals of two large STATS ChipPAC shareholders, U.K.-based investment firm Marathon Asset Management LLP and New York City-based Oz Management LLC, to give up their stakes to STSPL.

Temasek's leadership remained upbeat about the day's dealings. "We are happy to have succeeded in increasing our stake in the company," Tow Heng Tan, senior managing director of investment and co-chief investment officer of Temasek Holdings, said in a statement.

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