STATS ChipPAC investor alleges convertible offer is not appropriate

By Lisa Kerner

Charlotte, N.C., April 9 - Stats ChipPAC Ltd. said investor Fore Research & Management sent a letter to the Singapore Securities Industry Council protesting Stats ChipPAC's conditional cash offer and proposed options announced March 1 by Goldman Sachs on behalf of Singapore Technologies Semiconductors Pte Ltd.

Fore Research notified the Singapore Securities Industry Counsel that it holds $43.6 million principal amount of the convertible subordinated notes due 2008 and said that the convertible notes offer is "not an appropriate offer under the Singapore Code on Take-overs and Mergers."

Fore claims the offer is based on "see-through" pricing which does not take into account interest that would be payable through the maturity of the convertible notes or the equity option premium embedded in the notes.

Singapore Technologies Semiconductors is offering to buy for cash the remaining shares in Stats ChipPAC it does not already own.

The offer, including shares represented by American Depositary Shares, expires on April 13.

Under the agreement announced on March 1, the offer price is S$1.75 for each share and S$17.50 for each ADS in cash.

However, if shares tendered into the offer result in STS owning at least 90% of outstanding shares in Stats ChipPAC, STS plans to offer a purchase price of S$1.88 per share or S$18.80 per ADS.

In addition, Singapore Technologies has a conditional offer for Stats ChipPAC's outstanding $115 million convertible notes due 2008 and $150 million 2.5% convertible notes due 2008, according to a company news release.

Singapore-based Stats ChipPAC provides semiconductor packaging design, assembly, testing and distribution solutions.

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