Taiwan's Advanced Semi Engineering Calls Off Buyout

Taiwan-listed shares of Advanced Semiconductor Engineering (ASE) rose sharply on Wednesday, after the chip packaging firm called off plans to be bought by private equity firm Carlyle due to price.

ASE shares were almost 5% higher shortly after trading began in Taiwan on Wednesday. They initially opened up by their daily limit of 7%, before falling back.

Carlyle had agreed in late November last year to buy the world's biggest chip packaging and testing company for T$39 (US$1.17) per share and later raised its offer to T$39.50 amid a slew of buyouts by foreign private equity funds in Taiwan. That values ASE at $5.49 billion.

Private equity firms, which look for steady cash flow and long-term growth prospects, are investing in the maturing semiconductor industry as it goes through a phase of slower but steadier growth.

"But the price failed to reflect the company's value after an evaluation so we can't support the investment team's acquisition plan," the company said in a statement posted on the Taiwanese stock exchange's Web site.

No other details were given.

ASE counts Qualcomm and Freescale among its major clients. It competes with local rival Siliconware Precision Industries and U.S.-based Amkor Technology.

Shares of Siliconware, which many believed would attract new investors if ASE shares were delisted, saw its stock fall by the limit 6.92% in early Wednesday trade in Taiwan.