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Shares of S’pore chipmaker jump on report of bids

SINGAPORE — Shares in Singapore’s STATS ChipPAC, majority-owned by Temasek Holdings, jumped as much as 12 per cent yesterday to its highest in more than three years, on reports that two Chinese chip-testing companies are considering bids for the unprofitable firm.

SINGAPORE — Shares in Singapore’s STATS ChipPAC, majority-owned by Temasek Holdings, jumped as much as 12 per cent yesterday to its highest in more than three years, on reports that two Chinese chip-testing companies are considering bids for the unprofitable firm.

Shares in the chipmaker rose to as high as S$0.675 before giving back a little to close up 9 per cent at S$0.66. The Singapore Exchange has queried the company on the unusual price movement.

Jiangsu Changjiang Electronics Technology and Tianshui Huatian Technology are working on offers after the chipmaker, valued at S$1.3 billion, said it had received takeover approaches, said people familiar with the matter. A deal could be reached early next month, one of the sources said.

Semiconductors is a strategic industry needed for China’s economic development and national security, the official Xinhua news agency said in June, citing a plan issued by the State Council. China will increase financial support for the industry and plans to set up a national investment fund, said Xinhua.

STATS ChipPAC, the world’s fourth-largest provider of semiconductor testing and assembly services by sales, narrowed its loss in the second quarter as sales rose. The firm said in June that it had ended talks with one party, while discussions with other potential bidders were continuing.

Shares in the chipmaker have jumped 71 per cent since the middle of May, when the company first announced it had received an approach. Advanced Semiconductor Engineering, the world’s biggest chip assembler and tester, had previously considered an acquisition, said sources.

A purchase of STATS ChipPAC would add to the US$31.1 billion (S$38.9 billion) of semiconductor deals announced worldwide in the past year, data compiled by Bloomberg showed, and would further China’s goal of bolstering its technology industry. Changjiang has a market capitalisation of 9 billion yuan (S$1.82 billion), while Huatian is valued at 8.1 billion yuan.

Temasek acquired a majority holding in STATS ChipPAC in May 2007, paying S$1.75 per share for an 83 per cent stake. AGENCIES

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