Acer announces further release of BenQ shares
Jun 30, 2005
Acer Inc. yesterday announced further release of its holding of BenQ shares in its continued effort to achieve separation of the two business entities and generate additional incomes. Under the plan, Acer would release no more than 100 million BenQ shares in global depository receipts (GDPs), a move that would lower Acer's holding of BenQ shares from the current 9.52 percent to 5.2 percent.
Acer has been selling BenQ shares over the past three years at a rate of five percent each year, following the PC giant's move to divide itself into three business entities -- Acer, BenQ and Wistron. Last year BenQ shares released by Acer went to AU Optronics, Taiwan's largest TFT-LCD panel maker and the world's third largest. AU is expected to become BenQ's largest shareholder after Acer completes the shares-release this year.
The flat-panel giant declined to comment whether it would purchase BenQ shares released by Acer this year, saying no decisions had been made at the company's shareholders' meeting. Acer would gain NT$1.8 billion after the sale, translating into an additional NT$0.8 to the company's earnings per share, based on Acer's outstanding capital.
As for complete withdrawal from BenQ's operations, Acer did not comment, only saying it had asked the new consulting firm founded by Stan Shih, founder and former chairman of the Acer group, to look into possibility of further sales of BenQ shares. Acer's representation in BenQ's board of directors would lower from three seats to one. The company pointed out compete withdrawal from the BenQ board would depend on how the shares-release went.
BenQ itself is expected to release 100 million shares in GDRs this year to get the money it needed for the purchase of Siemens' mobile device unit. AU, meanwhile, is expected to issue another 270 million to 330 million shares in American depository receipts (ADRs) to raise capital.
Overseas investors had been selling BenQ shares recently after news of its purchase of the Siemens unit. BenQ's share price had come to the lowest level of this year after the stock's ex-right.
Yet foreign investors have begun dip-buying. Overall, foreign investors had a 19.74 percent holding of BenQ by June 28, translating into 457.391 million shares.