Acer cuts stake in Wistron by about one third

Fixed-price transaction completed at 1.45% discount to latest close.
Wistron Corp, one of TaiwanÆs top electronics contract manufacturer, yesterday saw $128 million worth of its GDRs change hands as Acer reduced its stake in the company by about one third.

The sale, which was arranged by Credit Suisse, comprised 10 million Global Depositary Receipts û each equal to 10 common shares û which were offered and sold at a fixed price of $12.76 apiece. The price translated into NT$40.80 or a 1.45% discount to ThursdayÆs (April 27) close of NT$41.40 on the Taiwan stock exchange.

The discount was quite modest given that the share price gained 3% yesterday on the back of stronger-than-expected first quarter earnings.

The strong results helped underpin the demand for the placement, however, with about 20 investors snapping up the shares. About half of the deal went to hedge funds with the other half acquired by long-only funds, sources said. Two thirds were said to have stayed in Asia, while European investors took the rest.

The sale accounted for about 8.4% of the companyÆs outstanding share capital and will see AcerÆs stake in the company drop to 16.2%. The computer hardware manufacturer has a 90-day lock-up on the remaining shares.

Wistron was formed from computer hardware manufacturer AcerÆs design and manufacturing service unit in 2001 and is now one of the world's leading ODM companies. It also makes X-box 360 consoles and is aiming to boost its bottom line by focusing more on high-margin items like personal-digital-assistants and hand-held devices that combine computing and mapping features via global positioning systems.

Wistron said its unaudited earnings per shares rose to NT$1.11 ($0.03) for the first quarter of 2006, from NT$0.4 in the same period last year.

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