Taiwanese phone device manufacturer Foxconn has agreed to buy a NT$11.7bn (US$386.7m) stake in local mobile operator Asia Pacific Telecom (APT).
Earlier this month, APT’s board decided to issue around 827 million shares via a private…
Taiwanese phone device manufacturer Foxconn has agreed to buy a NT$11.7bn (US$386.7m) stake in local mobile operator Asia Pacific Telecom (APT).
Earlier this month, APT’s board decided to issue around 827 million shares via a private placement.
Foxconn, via its wholly-owned subsidiary Ambit, has bought approximately 583 million of those shares at NT$20 each, as it seeks to diversify its revenue sources.
This represents an 11.5% premium on APT’s closing price on 23 May. Following the deal announcement, its shares climbed from NT$17.20 to NT$18.05 at closing, giving it a market capitalisation of NT$60bn (US$2bn).
The device maker said in a stock exchange announcement yesterday that it could introduce international strategic investors to buy the remaining shares at a later stage.
Foxconn plans to merge Ambit and APT via a share swap, with APT being the surviving company.
The exact swap ratio will be calculated based on Ambit’s book value per share and APT’s 20-day average stock price before the merger agreement date. If APT’s average stock price is under NT$20 per share, the calculation of the swap will be based on NT$20 per share.
Foxconn, which has seen its revenue growth from PC and phone manufacturing slow, has been seeking to diversify its activities and begin providing services. Last October, the vendor spent US$312m in Taiwan’s hotly-contested 4G auction.
It has also been linked to several acquisitions of late, including local cableco China Network Systems (CNS) and Taiwan Mobile, the country’s third largest mobile operator.
Conglomerate Ting Hsin had also been rumoured as a potential suitor for APT. Its mobile operator Taiwan Star Cellular is currently in the process of buying Vibo Telecom, a 3G mobile network operator in the country.
APT is mid-sized wireless player in the Taiwanese mobile market, which is home to six national operators in total.