Foxconn International Holdings, the mobile handset arm of Taiwan's top electronics component maker, Hon Hai Precision Industry, has entered into a share swap deal with the management of its latest acquisition target to raise its takeover stake.
On May 12, Foxconn concluded a takeover of Chi Mei Communication Systems, an unlisted handset maker and supplier to Motorola, taking a 56 per cent stake in the company for $611 million.
Foxconn shares were suspended on Thursday at a last-traded price of $6.15 pending an announcement that was made yesterday about a new development in the takeover.
According to the announcement, Foxconn issued 27 million of its own shares to Chi Mei staff at $5.065 a share - a 17.64 per cent discount to their last traded price. The deal raised $136.12 million in fresh capital for Foxconn.
At the same time, Foxconn bought 19 million additional shares in Chi Mei for $138 million, lifting its stake in the handset maker to 69.23 per cent.
The transaction left Foxconn's existing shareholders with a small dilution of their stakes and a cash bill of just under $2 million to settle in return for the enlarged stake.
