A group of investors of gaming software developer XPEC Entertainment Inc. (????) staged a protest against a botched tender offer in front of the Financial Supervisory Commission (FSC) Friday, asking for an investigation into the failed deal, which resulted in massive losses for them.
More than 50 XPEC investors showed up in front of the FSC, the top financial regulator in Taiwan, to file a petition, demanding the commission launch a probe into possible irregularities in the tender offer deal.
A total of 3,605 XPEC investors have organized a self-help association after Japan-based Bai Chi Gan Tou Digital Entertainment Co (????) on Tuesday withdrew a tender offer the potential suitor had proposed in late May to acquire 38 million XPEC shares or a 25.17 percent stake in the Taiwanese firm at NT$128 (US$4.04) per share.
The acquisition price represented an almost 22 percent premium over XPEC's closing price of NT$105.00 on May 31.
After the announcement of the tender offer, many investors rushed to pick up XPEC shares in a bid to participate in the tender offer. The buying lifted XPEC shares to a recent high of NT$114 seen on June 1 and moved between NT$112 and NT$101 in the following sessions.
Following a green light issued by the Investment Commission on the share acquisition deal on July 22, those investors who own XPEC shares agreed to sell their holdings to the Japanese buyers and the goal set by the tender offer to buy 38 million XPEC shares was met on Aug. 18.
However, speculation emerged in mid Aug. 19 that Bai Chi Gan Tou would delay the acquisition, which started to push XPEC shares lower. The Japanese firm extended the deadline of the payment in late August, and even worse, on Tuesday, it announced it had decided to walk away from the deal entirely.
After the failure to complete the deal, shares of XPEC fell 10 percent, the maximum daily decline, for three days in a row. On Friday, the stock closed at NT$56.90 on the over-the-counter market.
Meeting with the protesters, Wang Li-ling (???), chief secretary of the FSC's Securities and Futures Bureau, received the petition, promising to protect investors' interest by finding out who should take responsibility for the losses caused by the failed deal.
Wang said that the FSC is scheduled to hold a public hearing on Sept. 9 to review the domestic tender offer mechanism and collect opinions about tender offers implemented in the major markets in Asia, the United States and Europe in an attempt to improve the country's system.
Earlier this week, the FSC said that it will provide investors with the necessary assistance to seek compensation from the Japanese firm.
The protesting XPEC investors also asked Friday for an explanation from the Investment Commission on why the commission approved the deal. In response, the commission said that it simply looked into whether the acquisition would pose any threat to national security but did not guarantee the deal would go through.
Affected by the plunge of XPEC shares, some other game stocks moved significantly lower Friday with International Games System Co. (????) down 10 percent to close at NT$175.00, and Wayi International Digital Entertainment Co. (??) down 9.44 percent to end at NT$6.52.
Source: Focus Taiwan News Channel