Lite-On to buy affiliate at over 20% premium

In a meeting yesterday, the board of Lite-On approved a purchase of the common shares of Lite-On IT at a price of NT$32.75 per share. The purchase is to be conducted between Jan. 31 and March 15 through Baoyuan, a fully owned subsidiary of Lite-On.

With Lite-On IT's closing price of NT$26.8 yesterday, the NT$32.75 price represents a premium of 22.2 percent.

The total purchase price would be about NT$17.452 billion, Lite-On said.

According to Lite-On, it currently holds a 42-percent stake in Lite-On IT and will purchase an additional 81.54 million shares, or an 8.89-percent stake. It will also seek regulatory approval from domestic and overseas agencies, it said.

After the open-market purchase, Baoyuan will issue special shares that it will swap with the shares of Lite-On IT, which will then become a fully owned subsidiary of Baoyuan.

Then, Baoyuan will merge with Lite-On. This merged firm will then own Lite-On IT as a subsidiary.

“The deal will allow us to solidify our status as the leader in global optic disc driver manufacturing,” Lite-On said. “We can share technology and R&D resources and offer customers a complete range of products and solutions.”

“Meanwhile, demands for cloud computing, telematics and medical equipment products are increasing and will represent new revenue streams for us,” Lite-On added.

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