STATS ChipPAC

STATS ChipPAC: In a response to SGX's query in relation to yesterday's 25.5% surge in share price, STATS ChipPAC provided that there has been no material development since the group's previous announcement on 16 May- where it was contacted by a third party to explore a potential takeover offer. Recall, in Mar 2007, Temasek Holdings made a failed attempt to take the company private with an offer price of $1.75 or 82% above its book value. However, investors should take into account the different market conditions in early 2007, where the global economy was close to its peak. Further, we note that the counter has a very small float with Temasek owning 83.8% and Marathon Asset Management another 4.7%. This may pose a uphill task for a successful third party bid, taking into account Temasek's cost of investment. At the two-year high of $0.615, STATS ChipPac is valued at 1.17x P/B, compared to upstream Taiwanese peers average of 1.7x.