Yageo, one of Taiwan’s largest electronics manufacturers and a supplier to Apple, expects to wrap up a $650 million international stock sale on Monday.
The shares will trade at the Luxembourg Stock Exchange in the form of global depositary receipts, or GDRs. Funds raised will be the largest via GDRs by a Taiwan company since 2013; it's also the biggest GDR sale by an Asian company so far this year, Yageo said on Wednesday. No small feat: Yageo expects to close the deal amid the global coronavirus pandemic. Taiwan is among Asia’s least-hit economies with 420 COVID-19 cases as of Sunday.
Money generated from the stock sale will be used as operating capital, according to a company announcement. Each GDR represents five common Yageo shares, and are priced at the equivalent of NT$308.10 per share. Yageo’s underlying shares closed at NT$339.50 at the Taiwan Stock Exchange on Friday, and have gained more than a fifth in the past 12 months. The GDR offering was three times oversubscribed, Yageo said.
Yageo, led by billionaire Pierre Chen, has also been in the news of late in connection with its planned $1.8 billion acquisition of U.S. electronics component supplier Kemet. That purchase, announced last November, advanced on Wednesday when Taiwan’s Fair Trade Commission announced regulatory approval. Yageo still needs approvals from the Committee on Foreign Investment in the U.S., or CFIUS, and mainland China’s Anti-Monopoly Bureau, according to a company statement. Combined revenue of the two companies will total about $3 billion, give Yageo an overall network of 42 plants worldwide, and expand Yageo’s business potential in automotive electronics, 5G networking and communications, robotics and automation and industrial segments, including power supply, the company says. Yageo will pay $27.20 per share for Kemet; Florida-headquartered Kemet’s shareholders approved the sale in February. Kemet’s New York Stock Exchange-traded stock closed at $25.63 on Friday.
Yageo, which makes passive electronics components such as resistors and capacitors, said earlier this month its business in the first quarter of 2020 was hurt by the pandemic outbreak. Revenue declined 12% from a year earlier to NT$10 billion, or $330 million, but has normalized after the resumption of production at mainland factories. The company “will take necessary steps to gradually recover production capacity in China and improve the issue of low inventory level for finished goods,” Yageo said.
Besides Apple, Yageo’s brand customers include IBM, Nvidia, Cisco, Dell, Samsung, Philips and Siemens.
Founded in 1977, Yageo’s main shareholders include both CEO Pierre Chen, as well as his brother Wood Chen. Pierre, a notable art collector as well as entrepreneur, ranked no. 712 on the 2020 Forbes Billionaires List released on April 7, with an estimated fortune of $2.9 billion. Yageo began trading at the Taiwan Stock Exchange in 1993.
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