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June 24, 2017

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Hon Hai's Gou submits bid to acquire AP Telecom in person

TAIPEI, Taiwan -- Hon Hai Precision Industry Co. Chairman Terry Gou yesterday personally led a delegation of executives to present their offer to acquire Asia Pacific Telecom (亞太電信).

Asia Pacific Telecom yesterday held its shareholders' meeting and began reviewing acquisition proposal presentations from a number of prospective buyers including SBI, a South Korea-based venture capital company, and the Taiwan Star Cellular Corp. (台灣之星), the telecom arm backed by the Ting Hsin International Group (頂新國際集團).

Most notably, Gou yesterday expressed his strong resolve to purchase the telecoms carrier, stating that a down payment of considerable size has been prepared, while urging Asia Pacific Telecom managers to make the right decision and join the ranks of the Hon Hai conglomerate to compete in the global theater. Gou, however, said that the 15 minutes allotted for acquisition proposal presentations were not enough to fully convey Hon Hai's favorable terms and its soundness in terms of long-term strategic vision.

Gou stated that Asia Pacific intends to finalize its decision at the end of this month and will then finalize whether Hon Hai will be granted first place in the queue for acquisition price negotiations.

Asia Pacific's state-run enterprise stakeholders and future government policy changes will play a pivotal role in the acquisition bid, remarked Gou. Reports indicate that as 46 percent of Asia Pacific shares are held by members of Taiwan's investing public, potential buyers of the company may prefer to acquire ownership stakes held by state-run companies and government-affiliated enterprises such as the Taiwan Railway Company (台鐵), Mega International Commercial Bank (兆豐銀) and the Taiwan Business Bank (台企銀).

Gou stated that should the Asia Pacific acquisition go ahead, his next goal would be to establish fixed line telecommunication services, working to progress toward the strategic objective of building a presence in what Hon Hai terms the "eight screens, one network, one cloud" market sectors.

Gou also reiterated his demand for a formal written reply on whether the National Communications Commission will allow Hon Hai's telecoms arm to procure signal tower and network equipment from China-based Huawei (華為).

Asia Pacific Telecom shares, however, recorded an intraday low yesterday at NT$16.65 following a 7-percent tumble shortly after noon to close at NT$17.15, down NT$0.75.

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