Sep 10, 2009

ATIC bought CHRT

1. Abu Dhabi firm offers to buy Singapore's Chartered Semiconductor

Posted: 07 September 2009 1233 hrs

SINGAPORE: An Abu Dhabi investment firm has offered to buy Singapore's Chartered Semiconductor for US$3.9 billion, which would create one of the world's largest microchip makers, officials said on Monday.

The buyout by Advanced Technology Investment Company (ATIC) comes as chip companies around the world look to boost sales after being hit hard by falling demand brought about by the global slump.

Chartered chairman James Norling said the firm had been looking at several "potential strategic options" and the offer from ATIC was the best. "After carefully looking at all of these strategic options in front of us, we believe this proposal is definitely worthy for the company shareholders to consider," he said at a news briefing.

ATIC, Abu Dhabi's investment vehicle in the high-tech sector, is also the main shareholder in Globalfoundries, a joint venture with US firm Advanced Micro Devices (AMD), focused on making next-generation chips.

Chartered is the world's third biggest maker of custom-made chips, but it has been struggling to catch up with leaders Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corp (UMC), also of Taiwan. It has also been hit by the global economic crisis, but the industry is banking on rising demand for "billions of new mobile phones, cars, televisions, computers and other devices" that are run by chips, the firms said in a joint statement.

ATIC chief executive Ibrahim Ajami said the combined strengths of Chartered and Globalfoundries would make them number two in the world, behind market leader TSMC in terms of capacity. "Right now Chartered is ranked, from the microchip perspective, as the third leading foundry in the world. A combination with Globalfoundries would put us as the second leading foundry in the world," he said.

ATIC, which is owned by the Abu Dhabi government, wants to buy each Chartered ordinary share at S$2.68 in cash, valuing the company at about US$1.8 billion. Including Chartered's debt and convertible redeemable preference shares totalling US$2.2 billion, the transaction will have a total value of about US$3.9 billion, the two companies said in a joint statement. ATIC's offer per share for Chartered represents a premium of 14.2 per cent on its 30-trading day volume weighted average price, the statement said.

Singapore's Temasek Holdings, which owns about 62 per cent of Chartered, has thrown its support behind the deal, said Norling. He added that Morgan Stanley and Citigroup Global Markets have been hired as financial advisers to the Chartered board of directors while Deutsche Bank has been called in to advise shareholders, who must approve the move. The offer will also have to be sanctioned by the Singapore High Court. If it all goes ahead, the transaction could be sealed by the end of the year, Norling said.

Chartered chief executive Chia Song Hwee said the company would not solicit competitive bids, but would have to go through the process if there were unsolicited offers. "All parties concerned are very committed to make this scheme go through," Chia said at the news briefing.

ATIC chairman Waleed Al Mokarrab Al Muhairi said he believes Temasek's support for the deal will discourage any other interested parties. "We believe that we are the best choice for Chartered's current investors. We believe we have a compelling offer on the table," he said.

Ajami said if the deal goes through, both Chartered and Globalfoundries will have different management teams. However, he would not rule out merging the two in the future.

Globalfoundries chief executive Douglas Grose told AFP in an interview in April that the company will spend US$3.3 billion to build a manufacturing plant in New York's Saratoga County, which will be fully operational by 2012. Another US$2.7 billion will be invested to upgrade its operations in the German city of Dresden and boost overall processes as well as sales, marketing and design activities.

- AFP/yb/ir

2. Temasek Holdings to sell 62% stake in Chartered Semiconductor Manufacturing to Advanced Technology Investment Company

Sep 10, 2009 (Datamonitor Financial Deals Tracker via COMTEX) -- CHRT --

Singapore-based investment company Temasek Holdings (Private) Limited has agreed to sell its approximately 62% stake in Chartered Semiconductor Manufacturing, Ltd. to Advanced Technology Investment Company (ATIC).
ATIC is a technology investment company wholly-owned by the government of Abu Dhabi in the UAE, while Chartered is a Singapore-based semiconductor foundry that provides wafer fabrication services and technologies to semiconductor suppliers and systems companies.

Under the scheme of arrangement, each Chartered ordinary share will be acquired by ATIC for a cash consideration of SGD2.68 ($1.86) per share. The transaction represents an equity value of approximately SGD2,500 million ($1,739.48 million) and a total value of approximately SGD5,600 million ($3,896.44 million), including debt and convertible redeemable preference shares of approximately SGD3,100 million ($2,156.96 million) as of June 30, 2009.

The price represents a premium of 14.2% to its 30 trading-day volume weighted average price, 26.8% to its 90 trading-day volume weighted average price, and 44.2% to its 6-month volume weighted average price.

The acquisition of Chartered will be made through ATIC International Investment Company LLC, a subsidiary of ATIC. Once the transaction is completed, ATIC will be the sole owner of Chartered.

Earlier on May 29, 2009, according to Reuters, The Business Times reported that ATIC has made an offer to acquire a 60% stake in Chartered from Temasek Holdings. On the same day Chartered has denied of receiving such a bid from ATIC.

Morgan Stanley Asia (Singapore) Securities Pte., Ltd. and Citigroup Global Markets Singapore Pte., Ltd. are acting as joint financial advisors to Chartered, and each providing a fairness opinion to the board of directors of Chartered in connection with the transaction. Deutsche Bank AG is acting as an independent financial advisor to advise shareholders on the fairness of the offer.

Deal Value (US$ Million) 2415.79
Deal Type Private Equity
Sub-Category Exit
Deal Status Announced: 2009-09-07
Deal Participants

Target (Company) Chartered Semiconductor Manufacturing Ltd.
Deal Rationale

The transaction would allow ATIC to build on the complementary platforms of Chartered and GLOBALFOUNDRIES, with Chartered's customer relationships and capabilities in both 8-inch and 12-inch fabrication, and GLOBALFOUNDRIES' technology expertise, capacity profile and global footprint. By acquiring Chartered, ATIC is expanding its investments in the semiconductor industry which currently consist of a GLOBALFOUNDRIES facility in Dresden, Germany.

No comments:

Post a Comment