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Philips prices TSMC sell-off to raise $1 billion

Posted: 09 Aug 2005 ?? ?Print Version ?Bookmark and Share

Keywords:foundry chip?

Royal Philips Electronics has announced that its previously announced plan to sell off part of its shareholding in foundry chip maker Taiwan Semiconductor Mfg Co. Ltd could raise a billion dollars if over-allotment options are exercised.

The basic offer of 528,010,000 shares is set to raise 715 million euro (about $885 million). And on this basis Philips is set to book a non-taxable gain of approximately 420 million euro (about $520 million) in its earnings for the third quarter of 2005. The sale is scheduled to close on Aug. 10 and Philips has priced its offer at $8.60 per American Depositary Share where each ADS represents five TSMC shares. It represents a reduction in Philips' stake in TSMC from 18.7 percent to 16.6 percent.

The underwriters have also been granted a 30-day option to purchase up to 15 percent additional common shares in the form of ADSes to cover over-allotments, if any. If the over-allotment option is exercised in full, Philips' holding in TSMC will be reduced further to 16.3 percent, and Philips will receive additional gross proceeds of approximately 105 million euro (about $130 million) and book an additional non-taxable gain of about 60 million euro (about $75 million) in its earnings for the third quarter of 2005.

Philips has agreed not to sell additional TSMC shares before the end of 2006, either in Taiwan or international markets. Philips will therefore remain among the largest shareholders in TSMC for the foreseeable future.

- Peter Clarke

EE Times

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