Yageo shareholders block private equity deal

Rather than seek public financing, Yageo wanted to sell up to 500 million shares to a private equity investor at NT$10 ($.33) apiece, according to the company's annual meeting agenda. This was intended to bolster operational capital and improve financial structure, while attracting long-term strategic investors.

However, the proposal failed to attract the two-thirds majority consent required by regulators.

Shareholders questioned the move in the light of management's earlier decision to enact capital reduction measures, which will result in the return of NT$3 per share to investors, local media reported. A proposed capital reduction of NT$6.62 billion - representing 30% of the company's total equity - was approved.

Two years ago, KKR teamed up with Pierre Chen, Yageo's founder, chairman and CEO, on a $1.6 billion privatization bid. However, it was rejected by regulators on the grounds that minority investors didn't have sufficient information to determine whether the acquisition was in their best interest.

KKR committed $230 million to Yageo in 2007 for its debut investment in Taiwan.

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• Topics
• Greater China
• Industrials
• Taiwan (China)
• KKR
• manufacturing