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The Honolulu Advertiser
Posted on: Saturday, November 25, 2006

Carlyle seeks to get chip maker

By Christopher S. Rugaber
Associated Press

WASHINGTON — Private equity firm Carlyle Group said yesterday it is in talks to acquire Advanced Semiconductor Engineering Inc., which tests and assembles computer chips, for $5.46 billion.

Washington-based Carlyle, which owns Hawaiian Telcom, said it is leading a group of investors that wants to make an all-cash acquisition of Taiwan-based Advanced Semiconductor for $5.94 per American depositary receipts. The offer represents a 13 percent premium over the Wednesday closing price of Advanced Semiconductor's shares.

The company's ADRs soared on news of the offer, up 80 cents or 15.2 percent to end at $6.06 on the New York Stock Exchange.

ASE's chairman and chief executive, Jason Chang, has agreed to roll his shares and those owned by his holding company, ASE Enterprises Ltd., into another holding company formed by the investor group, ASE and Carlyle said. Chang and ASE Enterprises together own about 18.4 percent of Advanced Semiconductor shares.

Carlyle has made several large investments in the semiconductor industry. The firm, as part of a buyout consortium, announced plans to buy chip-maker Freescale Semiconductor Inc. Sept. 15 for $17.6 billion. Carlyle also owns Jazz Semiconductor, AZ Electronics and Toshiba Ceramics.

ASE will benefit from the "accelerating global outsourcing" of semiconductor testing and assembly, a trend driven by "recent ownership shifts and a strategic transformation of the industry," said Greg Zeluck, managing director and co-head of Asia Buyouts at the Carlyle Group.

Carlyle said the discussions between the consortium and ASE are ongoing "and there can be no assurance that an offer will ultimately be made" until the discussions are complete.

Hawaiian Telcom was formed last year after Carlyle Group acquired the local phone company from Verizon Communications for $1.6 billion.