ASE shares soar as Carlyle gives up(2)

Shares in Taiwan-based ASE, the world’s largest chip testing company, soared to a seven year high today, after The Carlyle Group withdrew its $6 billion bid for the company. Many investors felt the offer was too low.

The Carlyle Group has withdrawn its $6 billion (€4.4 billion) offer for Taiwanese chip manufacturer Advanced Semiconductor Engineering, sending the company’s share price soaring to a seven year high.

ASE said in a statement that Carlyle had withdrawn its interest in the business, after the board rejected the buyout firm’s T$39.50 per share bid as being too low.

The company’s shares rose on the news that the board had fended off the buyout group’s offer, which it claimed undervalued the company. The bid was nearly T$3 dollars below last night’s closing share price.

Analysts also believe the reluctance of the Taiwanese government to approve the de-listing of the company has hampered the deal’s progress.

The chip company generated sales revenues of $3.1 billion in 2006 and it employs over 28,000 people worldwide. Advanced Semiconductor’s shares have risen 16 percent since its chairman Jason Chang and Carlyle announced on November 24 they were planning a buyout of the company.

Carlyle is one of the most private equity active investors in the Asian market, taking part in more than $25 billion of technology-related takeovers last year . Some analysts have speculated that its failure to win ASE may have a knock-on effect on other potential buyout deals in Taiwan.

However, there was better news for Carlyle in the region today. In Japan, it announced the acquisition of chip company Nakaya Microdevices for 1.5 billion yen ($12.6 million), while it also appointed Eric Mason as managing director and head of its leveraged finance group in the Asia-Pacific region.