LCY Chemical shareholders approve acquisition offer by American firm

Taipei, The shareholders of LCY Chemical Corp. of Taiwan on Monday approved a proposal for the company's acquisition by the U.S.-based investment firm KKR & Co.

At an extraordinary general meeting, 83.35 percent of the LCY Chemical shareholders present voted in favor of the acquisition proposal, while 82.85 percent approved a plan to take the company off the local equity market and go private.

In July, LCY Chemical announced a deal in which KKR would buy all of its outstanding shares for NT$47.8 billion (US$1.58 billion), or NT$56 per share.

The acquisition would also include a cash dividend of NT$2.9 to LCY Chemical shareholders, which would bring the full price of the deal to NT$53.1 per share, the Taiwanese company said.

It said KKR will carry out the acquisition through its subsidiary Cartlon, which will set up a joint venture with the family of LCY Chemical former Chairman Li Bowei Lee (???).

After the acquisition, KKR will hold a 55 percent stake in LCY Chemical, while Lee's family will hold 45 percent.

Currently, the Lee family is the biggest shareholder in LCY Chemical with a 27.8 percent stake.

Lee resigned as chairman after the company was implicated in a series of gas explosions in Kaohsiung in 2014 that resulted in 32 fatalities.

In Monday's general meeting, the current chairman T.H. Hong (???) said LCY Chemical has emerged from the impact of the Kaohsiung explosions and that KKR's decision to acquire the company was an indication of an optimistic outlook on LCY Chemical.

Market analysts said that as the impact of the explosions faded, LCY Chemical showed sound fundamentals, posting earnings per share of NT$1.79 in the first half of the year. The company's earnings per share was NT$4.02 in 2017 and NT$4.65 in 2016.

After LCY Chemical delists from the equity market following its acquisition by KKR, it hopes it will list again in five years' time, according to Hong.

He said LCY Chemical has no plans to launch an initial public offering as a Chinese yuan-denominated A share company in China.

On Monday, shares of LCY Chemical closed up 0.39 percent at NT$51.50, outperforming the main board, where the benchmark weighted index ended down 1.12 percent to end at 10,725.80 points amid rising fears over trade friction between the United States and China .

Source: Focus Taiwan News Channel