UMC sets new benchmark for Taiwan

Pricing of a $200 million exchangeable into AU Optronics underlines the incredible strength of the Taiwanese equity-linked market.

The foundry manufacturer took the first steps yesterday Thursday towards monetizing a 4.3% stake in Taiwan's leading producer of large size TFT-LCD panels with one of the most aggressively priced equity-linked offerings to date. However, while the majority of market participants believe the deal has set the kind of tight benchmark which others can only hope to emulate, some argue that terms could have been pushed a lot further given the current trading levels of recent transactions.

Where none would disagree is that the valuation hinges on the prospective launch of a $770 million ADR offering for AU Optronics, which will give investors a stock that can be hedged. Without the ADR,...

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