Taiwanese regulators block KKR-led takeover bid for Yageo

Orion Investment, a company jointly held by KKR and Yageo Chairman Pierre Chen, first launched the takeover bid in April, offering $1.6 billion or a 14% premium to Yageo's last closing price.

That offer has been rejected because the group had not mollify doubts "about shareholder and investor protections, whether the offer price is reasonable, and level of transparency of information disclosure," Fan Liang-tung, executive secretary of the economic ministry's investment commission, announced. "The key concern is the consortium has leveraged the proposed deal too heavily with bank loans, and the rights of minority shareholders haven't been sufficiently protected over the course of the deal."

KKR invested $230 million in Yageo in 2007, its debut investment in Taiwan. By April, Chen, his family and funds managed by KKR collectively controlled 34.3% of Yageo's fully diluted outstanding shares.

In a statement, a KKR spokeswoman said that, even without approval for a takeover, Yageo will continue with its existing growth strategy, and "KKR will maintain its existing partnership and will continue to provide its full support."

"KKR remains committed fully to its investment in Yageo and its partnership with the company's leadership and management," KKR's Julian Wolhardt said in the statement. "Yageo has established a strong position in its industry, and KKR has full confidence in the ability of Yageo's management to continue to grow the company."

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• Topics
• Greater China
• Technology
• Buyouts
• KKR