The Carlyle Group has suffered a setback in its attempts to complete a $5.4 billion (€4.1 billion) deal for Taiwan-based Advanced Semiconductor Engineering, after the company terminated the buyout firm’s exclusivity agreement.
An independent valuation committee, appointed last November, has recommended that ASE open up the bidding process and invite other offers. Carlyle, which was bidding alongside Jason Chung, the company’s chairman and largest shareholder, had previously offered to pay about $5.4 billion for ASE.
Carlyle has not withdrawn its bid, which remains on the table. However, as a result of the recommendation, it has agreed to terminate exclusivity, expense reimbursement and break-up fees with Chang. It now faces the prospect of having to bid for ASE in a competitive auction.
Taiwan’s Commission and Ministry of Economic Affairs had previously threatened to intervene in the deal, suggesting that Carlyle might have broken market rules by failing to warn the regulator of its potential bid for the microchip producer.
Carlyle has suffered similar problems with the authorities in China, where it is looking to double its investment levels. The firm was forced to scale back its proposed stake in Chinese construction machinery maker Xugong from 85 percent to 50 percent, in order to circumvent opposition from the country’s government.