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Name
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Ji-Sheng Qiu, Crowe (TW) CPAs
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Address
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10F, No. 369, Fuxing N. Rd., SongShan
Dist., Taipei, Taiwan
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Telephone Number
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02-8770-5181
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Scope of Mandate
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Issue a fairness opinion issued by an independent expert pursuant to Article 13 of the Regulations Governing Information to be Published in Public Tender Offer Prospectus.
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Name
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Ming-Yang, Lai, WeTec International CPAs
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Address
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11F-6, No. 142, Sec. 3, Minquan E. Rd., Songshan Dist., Taipei City 105, Taiwan
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Telephone Number
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02-8770-5181
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Scope of Mandate
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With full knowledge and application
of reasonable procedure to assess the funding source, a confirmation letter proving the Bidder’s financial ability to pay
the tender offer consideration to be issued pursuant to Article 9(III) of the Regulations Governing Public Tender Offers for Securities
of Public Companies.
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5.
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Name, address, telephone number of the financial advisor
and the scope of its mandate: None
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6.
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Name, address, telephone number of the financial institution
and the scope of its mandate: None
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7.
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Name, address, telephone number of other appointed experts
and the scope of their mandates: None
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(Translation, for reference only)
II. TERMS
AND CONDITIONS OF THIS ROC OFFER
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1. Tender offer period:
From
February 7, 2020 (“Commencement Date”) to March 12, 2020 (“Completion Date”), the period
for accepting applications from Offerees is 9:00 a.m. to 3:30 p.m. (Taiwan time) each business day during the tender offer period.
Please note that the Bidder may file a registration statement with the FSC according to law and make an announcement to extend
the tender offer period, provided however that such extension period(s) shall not exceed a total of 50 days.
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2. Minimum and maximum number of securities to be acquired:
65,249,177
shares (“Offer Cap”), representing 30.0% of the total issued and outstanding share capital of the Target Company
(equal to 217,497,257 shares including 14,707,559 shares of private placements) (“Total Amount of Shares”)
as shown in the system of commercial and industry registration profile of the Department of Commerce, the Ministry of Economic
Affairs (last updated on November 19, 2019) (65,249,177 shares/ 217,497,257 shares ≒
30.0 %). If the shares effectively tendered do not reach the aforesaid number but reach 10,874,863 shares (representing
5% of the total issued and outstanding shares, the “Minimum Shares”), the Minimum Shares condition of this
tender offer (“ROC Offer”) will notwithstanding be satisfied. Under the circumstance that all the conditions
of this ROC Offer are satisfied (including the number of the shares to be effectively tendered has reached the Minimum Shares)
and this ROC Offer is not legally suspended, the Bidder will acquire the shares at the maximum of the Offer Cap; if the total
number of shares tendered exceeds the Offer Cap, the Bidder will purchase shares from all the Offerees of Common Shares at a pro-rated
percentage of shares based on the calculation method described herein.
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3. Consideration for this ROC Offer:
The
tender offer consideration for each Common Share of the Target Company is NT$57 in cash. Offerees shall be responsible for their
own securities transaction tax, income tax (if applicable), handling charges of the TDCC and securities brokers, bank remittance
fees, postage for registered mail, and all the other necessary and reasonable fees and taxation payable for paying the tender
offer consideration. Among such fees, the handling charges of TDCC and securities brokers are calculated separately according
to the number of deposit applications made by the Offeree. In addition, Offerees who apply for deposits through a custodian bank
are not subject to the handling charges of securities brokers. If there are any additional fees, the Bidder will, in accordance
with applicable law, make a public announcement disclosing such additional fees. When paying consideration to the Offeree, the
Bidder will deduct the foregoing relevant fees and taxes, excluding income tax, and such amount shall be rounded to the nearest
whole number in New Taiwan Dollars.
The
examples of the tender offer consideration and transaction costs are as follows:
(1). If a shareholder tenders in a sale of 1,000 shares through a securities broker, on the basis that the tender offer consideration for each Common Share is NT$ 57, the total tender offer consideration is NT$57,000.
【Shareholders,
whose stocks are deposited, tendering to deposit and to sell one time】
Transaction
costs: Securities transaction tax of NT$ 171 (57,000 x 0.3% = NT$ 171 (unconditionally rounded to the nearest whole number in
NT$), handling fee for the TDCC of NT$20, handling fee for securities broker of NT$20, remittance fee of NT$10, a total of NT$221.
The
amount of net consideration received by such Offeree = NT$57,000 - NT$221 = NT$56,779.
【Shareholders,
whose stocks are deposited, tendering to deposit and to sell two times】
Transaction
costs: Securities transaction tax of NT$171 (57,000 x 0.3% = NT$ 171 (unconditionally rounded to the nearest whole number in NT$),
handling fee for the TDCC of NT$40 (20 x 2 = NT$40), handling fee for securities broker of NT$40 (20 x 2 = NT$40), remittance
fee of NT$10, a total of NT$56,739.
The
amount of net consideration received by such Offeree = NT$57,000 - NT$261 = NT$56,739.
(2). If a shareholder tenders in a sale of 1,000 shares through a custodian bank, on the basis that the tender offer consideration for each Common Share is NT$57, the total tender offer consideration is NT$57,000.
【Shareholders,
whose stocks are deposited, tendering to deposit and to sell one time】
Transaction
costs: Securities transaction tax of NT$171 (57,000 x 0.3% = NT$ 171 (unconditionally rounded to the nearest whole number in NT$),
handling fee for the TDCC of NT$20, remittance fees of NT$10, a total of NT$201.
The
amount of net consideration received by such Offeree = NT$57,000 - NT$201 = NT$56,799.
【Shareholders,
whose stocks are deposited, tendering to deposit and to sell two times】
Transaction
costs: Securities transaction tax of NT$ 171 (57,000 x 0.3% = NT$171 (unconditionally rounded to the nearest whole number in NT$),
handling fee for the TDCC of NT$40 (20 x 2 = NT$40), remittance fee of NT$10, a total of NT$221.
The
amount of net consideration received by such Offeree = NT$57,000 - NT$221 = NT$56,779.
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4. Is any approval of, or registration with the FSC or other competent authority required? If so, has the Bidder received the approval or has the registration taken effect?
In
accordance with Article 43-1(II) of the Securities and Exchange Act and Article 7(I) of the Regulations Governing Public Tender
Offers for Securities of Public Companies, this ROC Offer shall be filed with the FSC for registration and publicly announced.
The Bidder made public announcement in accordance with the aforementioned rules on February 5, 2020, and filed the registration
with the FSC on February 6, 2020.
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5. Except those circumstances set forth in Article 19(VI) of the Regulations Governing Public Tender Offers for Securities of Public Companies, the Offeree is prohibited from rescinding the tender after the Bidder has made a public announcement upon the satisfaction of the conditions of this ROC Offer. The Article 19 (VI) of the Regulations Governing Public Tender Offers for Securities of Public Companies is as follows:
(1) A circumstance set out in Article 7 (II) of the Regulations Governing Public Tender Offers for Securities of Public Companies (i.e., For any competitive public tender offer for securities issued by the Target Company).
(2) The Bidder has submitted a regulatory filing with the FSC and made a public announcement of an extension of the public tender offer period pursuant to Article 18 (II) of the Regulations Governing Public Tender Offers for Securities of Public Companies.
(3) The tender may be rescinded under any other laws.
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6. Other important matters:
(1) If the Offerees have deposited shares of the Target Company into the central depository, the Offerees shall tender the shares by presenting to the securities brokers the passbooks of their central depository accounts and the authorized chop specimen. When the Offerees tender, they are deemed to have agreed that TDCC and the Bidder may provide KGI with the Offeree's name, address, personal ID number, GUI number and other information, for notifications or other matters related to this ROC Offer.
(2) The Offerees shall hold full ownership of the shares to be tendered. The shares to be tendered shall be free of any pledges, provisional remedial proceedings (such as provisional attachment and provisional injunction) or enforcement proceedings, and other transfer restrictions. If the shares tendered are subject to any provisional remedial proceedings (such as provisional attachment and provisional injunction) or enforcement proceedings, or any transfer restrictions, such shares shall not be deemed to have been tendered or be included in the number of tendered shares, notwithstanding that such shares have been deposited into the tender offer account of the appointed institution.
(3) Under the circumstance that all the conditions of this ROC Offer are satisfied, and this ROC Offer is not legally suspended, if the total number of shares tendered exceeds the Offer Cap, the Bidder will purchase shares from all the Offerees of Common Shares at a pro-rated percentage of shares based on the calculation method described as follows: if the shares tendered by any shareholder are between 2 and 1,000 shares, all of the tendered shares will be purchased; if the tendered shares are more than 1,000 shares, the Bidder undertakes to purchase 1,000 shares. In addition, the remaining shares of the Offerees who offer to sell more than 1,000 shares will be purchased on a pro-rata basis in multiples of 1,000 shares; and the further remaining shares will be purchased on a random basis by the Bidder until the Offer Cap is reached.
(4) The shares to be tendered shall be deposited into the TDCC. A tender of physical share certificates will not be accepted. Offerees who hold the physical share certificates should bring the certificates and their authorized chop specimen to the share agency of the Target Company and deposit such certificates into their central depository accounts before tendering.
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(Translation, for reference only)
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(5) This ROC Offer is based on the principle of “one person with one centralized securities depository account;” that is, if the same person has two or more securities depository accounts, only one account should be selected to participate in the tender, otherwise such person will not be considered. If the Offeree holds the securities issued by the Target Company at the accounts of two or more securities firms or custodian banks at the same time, and the Offeree first participates in the tender with only one of the accounts, and if he or she wants to participate in the tender with another account, the Offeree should transfer the securities to be deposited to the first account before participating in the tender again, or should withdraw the securities that had been deposited in the first account, and then participate in the tender with the second account. However, exclusions apply to domestic legal entities and situations set out in Items 1 to 3 and Item 5 of Article 75-6 (I) of the Operating Rules of the Taiwan Stock Exchange Corporation (Items 1 to 3 and Item 5 of Article 45-4 (I) of the Taipei Exchange Rules Governing Securities Trading on the TPEx) where business premises may open two or more trading accounts at one specific physical securities broker (i.e., discretionary investment accounts, overseas foreign institutional investor accounts, Mainland Area institutional investor accounts, trust accounts).
(6) Upon the approval of the competent authorities, the Bidder may suspend this ROC Offer if the Target Company undergoes any significant change or event in its financial condition or business operations (including, but not limited to, false statements or concealments in the financial reports or other business documents filed or announced by the Target Company), or the Bidder enters into bankruptcy or is reorganized due to court ruling, or other specified circumstances for the suspension of this ROC Offer are satisfied.
(7) The Offerees should understand that the completion of this ROC Offer depends on whether relevant conditions are met, including, but not limited to, the number of shares tendered, whether the Target Company has any significant change in its financial condition or business operations, whether the consent, approval, order, or permit from competent authorities or required filings are obtained or completed in a timely manner, and other matters not attributable to the Bidder. If all the conditions of this ROC Offer cannot be met before the completion of the tender offer period, or this ROC Offer is rejected or prohibited from being consummated, or the approval of the ROC Offer is revoked by the FSC or other competent authorities according to relevant laws and regulations, thereby resulting in the failure of this ROC Offer, the Offerees shall bear the risk of the failure of this ROC Offer and the market price fluctuation.
(8) The Bidder has remitted the tender offer consideration in the total amount of NT$3,719,203 (in 1,000's) to the tender offer account of the appointed institution, KGI Securities, on February 6, 2020. Under the circumstance where all the conditions of this ROC Offer are satisfied, the consideration of this ROC Offer will be paid by KGI Securities to the bank accounts of the Offerees provided by the TDCC through bank remittance within five business days (including the fifth business day) after the Completion Date (if extended, the completion date of the extended tender offer period). If the remittance cannot be completed due to the incorrect information of the Offeree’s bank account or other reasons, on the next business day after the failure of the remittance being confirmed, a check (crossed, non-endorsable and non-negotiable) will be mailed to the Offeree's address provided by the Offeree or the TDCC. The amount of the remittance or the check is the amount of the consideration of shares tendered less securities transaction tax, bank remittance fees, postage, handling charges of TDCC/securities broker and other related expenses; and such amount shall be rounded to the nearest whole number in New Taiwan Dollars.
(9) If necessary, the Bidder may extend the tender offer period by filing a report with the FSC and making a public announcement regarding such extension before the expiration of the original tender offer period.
(10) Please refer to this prospectus for other important terms and conditions.
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(Translation, for reference only)
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III.
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TYPE(S) OF CONSIDERATION AND FUNDING SOURCE FOR THIS
ROC OFFER
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The
consideration for this ROC Offer is NT$57 per share in cash.
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Details of self-own funds
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Explanations of details of self-own
funds:
Total funds required to pay cash
considerations for this ROC Offer is approx. NT$3,719,203 (in 1,000's), the entirety of which will be provided by the Bidder from
its self-own funds.
Is this transaction a multi-level
structured acquisition?
□s th
□ Contents of the plan:
(1) Investment
shareholding:
(2) Background of investors at each tier (including
information regarding shareholders and directors, capitals of the companies, and the identities of the ultimate providers of the
funds):
(3) Specific sources and details of the funds:
(4) Plans relating to the funds arrangements:
☑ No
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If the Bidder is a company and
will pay the consideration with its self-own funds, please provide the analysis based on the financial reports for the most recent
two years prior to this ROC Offer announcement:
Total funds required to pay cash
considerations for this ROC Offer is approx. NT$3,719,203 (in 1,000's), the entirety of which will be provided by the Bidder from
its self-own funds.
The following is the analysis
on the Bidder’s solvency, cash flow and profitability based on the audited financial reports for the most recent two years
prior to the announcement of this ROC Offer: Unit: %
Source:
Provided by Bidder
1. Solvency:
The current ratios of the Bidder in years 2017, 2018 and 2019 Q1-Q3 are 168.0%, 115.60% and 156.00%, respectively; and the quick
ratios are 142.30%, 94.30% and 126.50 %. The changes of the current ratios and quick ratios from 2017, 2018 to 2019 Q1-Q3 occurred,
because, according to the Bidder's consolidated statement, the changes in accounts receivables and inventory under current assets,
and the changes in current portion of long- term loans payable under current liabilities is subject to the changes in operational
needs from time to time.
2. Profitability:
The annual return on assets of the Bidder in 2017, 2018 and 2019 Q1-Q3 are 7.50%, 2.04% and (3.40)% respectively; the return on
equity is 14.20%, 3.60% and (8.00)%; the operation income to paid-in capital is 45.00%, 6.90 % and (19.30)%; the income before
tax to paid-in Capital is 40.90%, 11.70% and (16.50) %; the net profit margins are 8.90%, 2.60% and (6.00) %; and the earnings
per share is NT$ 3.36, NT$ 1.06 and NT$ (1.08).
3. The
cash flow ratios of the Bidder in 2017, 2018 and 2019 Q1-Q3 are 78.70%, 31.20% and (15.60)%, respectively; the net cash flow adequacy
ratios are 160.60%, 136.20% and (104.70)%; and the cash re-investment ratios are 7.30%, 2.40% and 0.60 %.
In sum, except for the solvency, the changes
in the profitability and cash flow of the Bidder in the past two years are attributable to the decrease in profit from 2017 to
2018 and 2019 Q1-Q3, and such changes remain reasonable without major irregularities.
With respect to this ROC Offer, the Bidder
has remitted the total amount of the tender offer cash consideration to the tender offer account of the appointed institution before
the Completion Date and the Bidder has retained the CPA, Ming-Yang, Lai of WeTec International CPAs, to issue a confirmation letter
proving the Bidder’s financial ability to pay the tender offer consideration. (Please refer to Annex 4 of this prospectus.)
Therefore, this ROC Offer is not likely to fail to be completed due to shortage of cash flow.
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☑ The
Bidder issues a letter of commitment for payment of tender offer consideration:
Please refer
to Annex 5 of this prospectus for details.
□ All
agreements or agreed documents of the funding arrangement, together with the announcement of this ROC Offer: Not applicable.
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(Translation, for reference only)
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Financing plan
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Source of funds:
Not applicable. The total funds
required to pay cash considerations for this ROC Offer are approx. NT$3,719,203 (in 1,000's), and the entirety of which will be
provided by the Bidder from its self-own funds.
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Borrower: Not applicable
Lender: Not applicable
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Collateral: Not applicable
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Whether assets or equity of
the Target Company or surviving company after merger are used as collateral for the Bidder’s financing repayment plan:
□ Yes – details
of the arrangement, and the evaluation of impact on the soundness of the financial condition or business operations of the Target
Company or surviving company after merger:
□ No – Assets
or equity of the Target Company or surviving company after merger are not used as collateral for the Bidder's financing
repayment plan.
■ Not applicable.
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2.
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The securities, as defined in Article 8 Item 1 of
the Regulations Governing Public Tender Offer for Securities of Public Companies, are offered as consideration of the tender offer:
Not applicable.
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3.
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The securities, as defined in Article 8 Item 2 of
the Regulations Governing Public Tender Offer for Securities of Public Companies, are offered as consideration of the tender offer:
Not applicable.
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(Translation, for reference only)
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IV.
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RISKS ASSOCIATED WITH PARTICIPATION IN THIS ROC OFFER:
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1.
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Risks of participating in this ROC Offer
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1)
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The Target Company undergoes any significant changes
in its financial condition or business operations, or the Bidder enters into bankruptcy or is reorganized due to court ruling,
or other specified circumstances for the suspension of this ROC Offer are satisfied.
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Following the commencement
of this ROC Offer, if any of the events under Items 1 to 3 of Article 43-5(I) of the Securities and Exchange Act occurs, including:
the Target Company undergoes significant changes in its financial condition or business operations (including, but not limited
to, false statements or concealments in the financial reports or other business documents filed or announced by the Target Company),
the Bidder enters into bankruptcy or is reorganized due to court ruling, or other specified circumstances for the suspension of
this ROC Offer are satisfied, after the approval of the competent authority, the Bidder may suspend this ROC Offer. Under such
circumstances, the Offerees shall bear the risk of failure of this ROC Offer as well as the risk of market price fluctuation.
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2)
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Approval of or filing with the FSC or other competent
authorities:
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In accordance with Article
43-1(II) of the Securities and Exchange Act and Article 7(I) of the Regulations Governing Public Tender Offers for Securities of
Public Companies, this ROC Offer shall first be publicly announced and filed with the FSC for registration. The Bidder has made
public announcement in accordance with the aforementioned laws on February 5, 2020, and filed with the FSC for registration on
February 6, 2020.
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3)
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Resubmitting filing and announcement:
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According to Article
43-5(II) of the Securities and Exchange Act and Article 9(VIII) of the Regulations Governing Public Tender Offer for Securities
of Public Companies, there is risk that, if necessary, the FSC may order the Bidder to amend the filing and resubmit the filing
and announcement of this ROC Offer.
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4)
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In times of natural disasters or emergencies:
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According to Article
7-1(II) of the Regulations Governing Public Tender Offer for Securities of Public Companies, the Bidder may not change the time,
manner, or location for payment of tender offer consideration as specified in this prospectus, provided that this restriction does
not apply in the event of a natural disaster or emergency. The occurrence and cessation of an above-mentioned event shall be determined
and announced by the relevant competent authorities pursuant to relevant laws and regulations. The Offeree shall bear this risk
on his/her own.
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5)
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Securities as the consideration for tender offer:
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Not applicable. The consideration
for this ROC Offer is entirely in cash. Therefore, there is no risk of failure or delay of this ROC Offer due to failure to promptly
issue securities.
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6)
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The risk during the period when the Bidder extends
the tender offer and the accompanying postponement of the Offeree's receipt of the consideration:
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According to Article
18(II) of the Regulations Governing Public Tender Offer for Securities of Public Companies, if an event provided under Article
7(II) occurs or for other justifiable reasons, the Bidder may report to the FSC and make a public announcement of an extension
of the tender offer period. However, the extension period(s) shall not exceed a total of 50 days. If there is an extension of the
tender offer period according to said Regulations, the Offeree shall bear the risk of market price fluctuation caused by the postponement
in receiving consideration.
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7)
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Following satisfaction of conditions for this ROC
Offer and announcement by the Bidder:
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Upon the satisfaction
of conditions for this ROC Offer and announcement by the Bidder, except for the occurrence of events stipulated under Article 19(VI)
of the Regulations Governing Public Tender Offers for Securities of Public Companies, even if the market price is higher than the
tender offer price, the Offeree may not rescind the tender and shall bear such risk.
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8)
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Number of shares tendered does not reach the Minimum
Shares:
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On the Completion Date, if the
number of shares tendered is below the Minimum Shares, then there is risk that this ROC Offer will not be completed.
In addition, if the shares
tendered by an Offeree are subject to any provisional remedial proceedings (such as provisional attachment and preliminary injunction)
or enforcement proceedings, or other transfer restrictions, such shares shall not be deemed to have been tendered or be included
in the number of tendered shares, notwithstanding that such shares have been deposited into the tender offer account of the appointed
institution. If the foregoing results in the number of shares tendered not reaching the Minimum Shares, then there is risk that
this ROC Offer will not be completed.
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9)
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Number of shares tendered exceeds the Offer Cap:
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If the total number of
shares tendered exceeds the Offer Cap, the Bidder will purchase shares from all the Offerees of Common Shares at a pro-rated percentage
of shares based on the calculation method described as follows: if the shares tendered by any shareholder are between 2 and 1,000
shares, all of the tendered shares will be purchased; if the tendered shares are more than 1,000 shares, the Bidder undertakes
to purchase 1,000 shares. In addition, the remaining shares of the Offerees who offer to sell more than 1,000 shares will be purchased
on a pro-rata basis in multiples of 1,000 shares; and the further remaining shares will be purchased on a random basis by the Bidder
until the Offer Cap is reached. Therefore, there may be a risk that the tendered shares will not be fully purchased.
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10)
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The Offerees should understand that the completion
of this ROC Offer depends on whether relevant conditions are met, including, but not limited to, whether the number of shares
tendered reaches the Minimum Shares, whether the Target Company undergoes any significant changes in financial condition or business
operations, and other matters not attributable to the Bidder. If all the conditions of this ROC Offer cannot be met in full, or
this ROC Offer is rejected or prohibited from being consummated, or the approval of the ROC Offer is revoked by the FSC or other
competent authorities, thereby resulting in failure of this ROC Offer, the Offerees shall bear the risk of failure of this ROC
Offer as well as the risk of market price fluctuation.
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11)
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The Offerees shall hold full ownership of the shares,
and the shares tendered shall be free of any pledges, provisional remedial proceedings (such as provisional attachment and preliminary
injunction) or enforcement proceedings, and other transfer restrictions; otherwise, such shares shall not be deemed to have been
tendered or be included in the number of tendered shares. The shares that were purchased by margin shall be settled before they
can be tendered.
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12)
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Other material risks which the Bidder is aware of
that may have impact on the tender process:
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None. However, the Offeree
is still advised to read in detail of this prospectus before tender.
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2.
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The following is an explanation of tax burdens of
shareholders who choose to participate in this ROC Offer:
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The
shareholders shall pay securities transaction tax at 0.3% of the actual transaction price. If the Shareholder is a corporate entity
operating business within the ROC or a corporate entity operating business outside the ROC but with its fixed place of business
and business agent within the ROC, according to the Income Basic Tax Act, the securities transaction income from the sale of shares
must be included in basic income and calculations for basic operating income tax. The deduction is NT$ 0.5 million, and the tax
rate is 12%. According to Article 7(III) of the Income Basic Tax Act, if the shares have been held for more than 3 years, only
one-half of the income should be added into the current year’s income derived from securities transactions in calculating
the income tax.
The
above explanation of tax burdens is for reference and does not constitute tax advice or an opinion on the tax burdens. Shareholders
should consult with tax professionals based on their individual investment situation regarding potential tax burdens related to
participating in this ROC Offer.
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3.
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Certain shareholders may face other risks. Shareholders
should consult with professional counsel for advice relating to specific situations.
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(Translation, for reference only)
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V.
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POST TENDER OFFER MATTERS:
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1.
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Method of payment of consideration by the Bidder:
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Time
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Within five business days (including the fifth business day) after the Completion Date (if extended, the completion date of the extended tender offer period), if all the conditions of this ROC Offer are satisfied, the consideration of this ROC Offer will be paid by the Tender Offer Agent, KGI Securities. [Please refer to the Note below.]
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Method
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Under the circumstance where all the conditions
of this ROC Offer are satisfied, the consideration of this ROC Offer will be paid by KGI Securities to the bank accounts of the
Offerees provided by the TDCC through bank remittance within five business days (including the fifth business day) after the Completion
Date (if extended, the completion date of the extended tender offer period). If the remittance cannot be completed due to the incorrect
information of the Offeree’s bank account or other reasons, on the next business day after the failure of the remittance
is confirmed, a check (crossed, non-endorsable and non-negotiable) will be mailed to the Offeree’s address provided by the
Offeree or the TDCC. The amount of the remittance or the check is the amount of the consideration of shares tendered less securities
transaction tax, bank remittance fees, postage, handling charges of TDCC/securities broker and other related expenses; and such
amount shall be rounded to the nearest whole number in New Taiwan Dollars.
To avoid the circumstance where the Offeree
receives insufficient consideration for paying the securities transaction tax, handling charges of TDCC and securities brokers,
bank remittance fees, postage or other related expenses, tenders of less than 2 shares will not be accepted.
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Location
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The Tender Offer Agent, KGI Securities, shall remit the consideration for this ROC Offer to the Offeree’s central depository account, or mail a check to the Offeree’s address provided by the TDCC.
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When the securities tendered are foreign securities
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Payment method for such securities: Not applicable.
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Method for buying/selling of such securities by the Offeree: Not applicable.
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Note:
Should any force majeure including the natural disasters or bank system malfunction occurs, KGI Securities may pay the tender
offer consideration after the force majeure has ceased.
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2.
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Handling method of securities settlement by the Offerees:
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Time
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Under the circumstance where all the conditions of this ROC Offer are satisfied, KGI Securities will transfer the shares to the Bidder within 5 business days (including the 5th business day) after the Completion Date (if extended, the completion date of the extended period).
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Method
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If the shares tendered have been remitted to the tender offer account of KGI Securities, such shares shall be transferred from the KGI Securities’ tender offer account (account no.: (9203)059600-8) to the Bidder’s central depository account by book entry.
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Location
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KGI Securities Co., Ltd.
Address: No. 700, Mingshui Road, Taipei, Taiwan R.O.C.
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Note:
Should any force majeure including the natural disasters or bank system malfunction occurs, KGI Securities may transfer the shares
after the force majeure has ceased.
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3.
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Method to return securities tendered but not acquired
by the Bidder:
|
|
Handling method if number of securities tendered
does not reach the Minimum Shares:
|
Time
|
|
Within 1 business day after the Completion Date (if extended, the completion date of the extended period). [Please refer to the Note below.]
|
|
Method
|
|
If this ROC Offer does not reach the Minimum Shares or is lawfully suspended after the approval by the competent authority, the offer to all the Offerees shall be rescinded, and the shares tendered shall be transferred from KGI Securities’ tender offer account (account no.: (9203)059600-8) back to the Offerees’ central depository accounts by book entry.
|
|
Location
|
|
KGI Securities Co., Ltd.
Address: No. 700, Mingshui Rd., Taipei City, Taiwan.
|
|
Handling method for the Bidder to return excess
securities tendered but not acquired if number of securities tendered exceeds the Offer
Cap
|
Time
|
|
Within 1 business day after the Completion Date (if extended, the completion date of the extended period). [Please refer to the Note below.]
|
|
Method
|
|
The Bidder's Offer Cap is 65,249,177 shares, representing
30.0% (65,249,177 shares/217,497,257 shares≒30.0%) of the total issued and outstanding share capital of the Target Company
(equal to 217,497,257 shares including 14,707,559 shares of private placements) as shown in the system of commercial and industry
registration profile of the Department of Commerce, the Ministry of Economic Affairs (last updated on November 19, 2019). Under
the circumstance that all the conditions of this ROC Offer are satisfied (including the number of the shares to be effectively
tendered has reached the Minimum Shares) and this ROC Offer is not legally suspended, the Bidder will purchase shares from all
the Offerees until the Offer Cap is reached. If the total number of shares tendered exceeds the Offer Cap, the Bidder will purchase
shares from all the Offerees of Common Shares at a pro-rated percentage of shares based on the calculation method described as
follows:
If the shares tendered by any shareholder are between
2 and 1,000 shares, all of the tendered shares will be purchased; if the tendered shares are more than 1,000 shares, the Bidder
undertakes to purchase 1,000 shares. In addition, the remaining shares of the Offerees who offer to sell more than 1,000 shares
will be purchased on a pro-rata basis in multiples of 1,000 shares; and the further remaining shares will be purchased on a random
basis by the Bidder until the Offer Cap is reached. Therefore, there may be a risk that the tendered shares will not be fully purchased.
The shares in excess of the Offer Cap shall be transferred
from KGI Securities’ tender offer account (account no.: (9203)059600-8) back to each Offerees’ central depository accounts
by book entry.
The calculation of the pro-rated percentage is as
follow:
Number of Offer Cap –
Number of Shares Undertaken to be Purchased
----------------------------------------------------------------------------------------------------------
Number of Shares Tendered
– Number of Shares Undertaken to be Purchased
|
|
Location
|
|
KGI Securities Co., Ltd.
Address: No. 700, Mingshui Rd., Taipei City, Taiwan.
|
Note:
Should any force majeure including the natural disasters or bank system malfunction occurs, KGI Securities may act after the force
majeure has ceased.
|
|
4.
|
Handling method when the consideration of this ROC
Offer is raised by new shares or corporate bonds but such shares or corporate bonds are not issued as scheduled:
|
Not
applicable. The consideration of this ROC offer is entirely in cash.
(Translation, for reference only)
|
|
VI.
|
STATUS OF THE BIDDER'S SHAREHOLDING IN THE TARGET
COMPANY:
|
|
|
1.
|
The shareholding status of the Bidder (including its
affiliates) and its directors and supervisors in the Target Company as of the filing date and the relevant transaction record
during the six-month period prior to the filing date:
|
|
|
(1)
|
Bidder (including its affiliates): Not applicable.
The Bidder (including its affiliates) did not hold any share of the Target Company when it filed this ROC Offer, nor did it trade
any shares of the Target Company during the six-month period prior to the filing date.
|
|
|
(2)
|
Bidder's directors and supervisor: Not applicable.
The Bidder's directors did not hold any share of the Target Company when the Bidder filed this ROC Offer, nor did they trade any
shares of the Target Company during the six-month period prior to the filing date.
|
|
|
2.
|
If the Bidder or its shareholders act as the director
or supervisor or shareholder holding more than 10% of total issued and outstanding shares in the Target Company, the name and
the shareholding status of such shareholder: Not applicable.
|
(Translation, for reference only)
|
|
VII.
|
THE FOLLOWING MATTERS SHOULD BE INCLUDED IN THE STATUS
OF THE PURCHASE/SALE OF THE SHARES OF THE TARGET COMPANY BY THE BIDDER:
|
|
|
1.
|
If the Bidder and its affiliates engaged in any buying
or selling of shares of the Target Company with the following individuals within 2 years prior to the filing of this ROC Offer,
please provide the date, counterparty, price and number of shares bought or sold:
|
Within
2 years prior to the ROC Offer, none of the Bidder or its affiliates have engaged in the transfer of shares of the Target Company
with the directors, supervisors, managers, or shareholders holding more than 10% of all the issued and outstanding shares of the
Target Company.
|
|
2.
|
If the Bidder and its affiliates entered into any
agreements or arrangements relating to this ROC Offer with the aforementioned individuals within 2 years prior to the filing of
this ROC Offer, please provide the content of the material agreement or arrangement:
|
|
Position/Identity
|
The content of the material agreement or arrangement
|
|
1.Directors
|
The Bidder signed a Shareholders’ Agreement with Mr. Liu, the chairman of the Target Company. Mr. Liu agreed to support and cause the election of at least 1 non-independent director among the director candidates nominated or designated by the Bidder after the completion of this ROC Offer. Please refer to Annex 6 for details.
|
|
2.Supervisors
|
Not applicable. (There is no supervisor in the Target Company.)
|
|
3.Managers
|
None.
|
|
4. Shareholders holding more than 10%
|
None.
|
|
5. Related Parties
|
None.
|
|
6. Specific Shareholders
|
None.
|
|
In order to protect the personal information
of the party who signed the Shareholders’ Agreement, his personal information such as ID numbers, household addresses and
others will not be disclosed.
Except for the Shareholders’ Agreement,
within 2 years prior to the filing of this ROC Offer, the Bidder did not enter into any agreements or arrangements relating to
this ROC Offer with the directors, supervisors, managers, shareholders holding more than 10% of all the issued and outstanding
shares, related parties or specific shareholders of the Target Company.
|
|
|
3.
|
If the Bidder and its affiliates entered into any
agreements or arrangements relating to this ROC Offer with the specific shareholders of the Target Company within 2 years prior
to the filing of this ROC Offer, please provide the content of the material agreement or arrangement, including whether it involves
participation in investments or other matters relating to the Bidder and its affiliates:
|
Except
for the Shareholders’ Agreement stated in this prospectus, the Bidder and its affiliates did not enter into any agreements
or arrangements relating to this ROC Offer with the specific shareholders of the Target Company.
(Translation, for reference only)
|
|
VIII.
|
THE FOLLOWING MATTERS SHOULD BE INCLUDED IN THE OPERATION
PLAN OF THE BIDDER FOR THE TARGET COMPANY:
|
|
|
1.
|
Purpose and plan to acquire the shares of the Target
Company:
|
|
nContinue
operating the business of the Target Company, and content of the plan: The Bidder, as a leading panel manufacturer in industrial
and commercial applications, has large and complete industrial and commercial customers all over the world. In order to satisfy
the customers' needs for one-stop shop in recent years, the bidder actively promotes value extension strategies and hopes to gradually
transform into an AIoT solution provider with panels as its core component. The Target Company, as a global leader in edge computing,
has demonstrated the competitiveness of leading-edge computing products and solutions in many vertical industrial and commercial
applications. On the basis of the existing industrial computer, the Target Company proposed a scalable software and hardware platform
integration solution to meet customers' needs for artificial intelligence applications. The establishment of a strategic partnership
between the Bidder and the Target Company is expected to achieve complementary advantages, and hopes to jointly satisfy the need
for digital transformation from automation to intelligence for customers in multiple fields. Therefore, the Bidder plans to acquire
the shares of the Target Company via this ROC Offer.
|
|
□Within one year of obtaining securities
of the Target Company, plan to transfer such securities to others, and content of the plan:
Not applicable. The Bidder does not have any
plan to transfer to third parties the Common Shares of the Target Company acquired through this ROC Offer within one year of the
acquisition.
|
|
|
|
|
|
|
2.
|
Plans for the following to occur to the Target Company
after completion of this ROC Offer:
|
|
Dissolution
|
n
No
□ Yes
The Bidder does not have any specific
plans to cause the dissolution of the Target Company after completion of this ROC Offer as of the date of this prospectus.
|
|
Delisting
|
nNo
□Yes - Content of the plan
The Bidder does not have any specific plan
to delist the Target Company after completion of this ROC offer as of the date of this prospectus.
|
|
Reorganization
|
n
No
□Yes - Content of the plan
The Bidder does not have any plan
to reorganize the Target Company after completion of this ROC offer as of the date of this prospectus.
|
|
|
Change of Capital
|
n
No
□Yes - Content of the plan
The Bidder does not have any plan
to change the capital of the Target Company after completion of this ROC offer as of the date of this prospectus.
|
|
|
Change of Business Plan
|
n
No
□Yes - Content of the plan
As of the date of this prospectus,
the Bidder does not have any plan to change the business plan of the Target Company. The Bidder and the Target Company will maintain
the current status in which both companies operate independently after completion of this ROC Offer.
|
|
|
Change of Financial Status
|
n
No
□Yes - Content of the plan
The Bidder does not have any plan
to change the financial status of the Target Company after completion of this ROC offer as of the date of this prospectus.
|
|
|
Change of Production
|
n
No
□Yes - Content of the plan
The Bidder does not have any plan
to change the production of the Target Company after completion of this ROC Offer as of the date of this prospectus.
|
|
|
Other Material Issues
Affecting the Rights and Interests
of the Target Company’s Shareholders
|
n
No
□Yes - Content of the plan
Unless otherwise specified
in this prospectus, the Bidder does not have any plan which will cause any material issues affecting the rights and interests of
the Target Company’s shareholders as of the date of this prospectus.
|
|
(Translation, for reference only)
|
|
3.
|
Plans and content of such plans for the following
personnel changes of the Target Company after completion of this ROC Offer:
|
|
Directors
|
Position Change: □Yes nNo
If any director of the Target
Company tenders more than one-half of the Target Company's shares being held by him/her at the time he/she was elected, he/she
shall, ipso facto, be discharged from the directorship when this ROC Offer is completed in accordance with Article 197(I) of the
Company Act. Whether the Target Company should convene a shareholders' meeting to by-elect director(s) depends on the number of
shares sold by such director(s).
The Target Company shall
convene a shareholders' meeting to re-elect directors. The Bidder may be elected or support others to be elected as directors of
the Target Company.
|
|
Supervisors
|
Position Change: □Yes nNo
Not applicable. There is no supervisor
in the Target Company.
|
|
Managers
|
□ Retirement, Severance
□Position Change
nOther:
As of the date of this prospectus,
the Bidder does not have any plan to cause the retirement, severance, or adjustment of the positions of the Target Company's managers
after completion of this ROC offer.
|
|
Employees
|
□ Retirement, Severance
□ Position Change
n
Other:
As of the date of this prospectus,
the Bidder does not have any plan to cause the retirement, severance, or adjustment of the positions of the Target Company's employees
after completion of this ROC offer.
|
|
|
4.
|
Aside from this ROC Offer, other plans for merger
and acquisition, or purchase or disposal of securities or material assets of the Target Company within one year after the Completion
Date of the tender offer period:
|
|
n
No
□ Yes
The Bidder does not have any other
plan for merger and acquisition or disposal of securities or material assets of the Target Company within one year after the Completion
Date of the tender offer period.
|
|
|
5.
|
The Bidder plans to cause the Target Company to become
delisted following completion of this ROC Offer:
|
Not
applicable.
(Translation, for reference only)
|
|
IX.
|
RESOLUTION OF THE BIDDER AND FAIRNESS OPINION
|
|
1. The minutes of board meeting where it was
resolved to initiate the tender offer: Please refer to Annex 1.
|
|
2. The fairness opinion issued by an independent
expert on the reasonableness of the tender offer consideration: Please refer to Annex 2.
|
|
Calculation of the cash consideration
|
Reasonableness of share exchange ratio
|
Reasonableness of other properties
|
|
After considering the quantitative financial data and objective market data, and based on the market approach, and the price-book ratio approach, and price-earnings ratio approach under the comparable companies approach, and also taking into account the premium rate in the tender offer cases, the reasonable range of the Target Company's per-share value is between NT$54.72 and 62.69. Therefore, since the Bidder intends to purchase the common shares of the Target Company via the Tender Offer at a consideration of NT$57 per share, which is within the range of the per-share value assessed above, the Tender Offer price is fair and reasonable.
|
Not applicable.
|
Not applicable.
|
|
The methods, principles, or calculations adopted
for determination of the tender offer price, and comparison among the internationally commonly used market-value method, cost method,
and discounted cash flow method.
|
(1) Explanation on the methods adopted
for evaluating the value of shares of the Target Company
Based on the scholars' perspectives
and theories, the following three valuation approaches are commonly used when evaluating a company's value:
I. Market
Approach: This includes market value analysis, comparable company analysis and comparable transaction analysis. This approach analyzes
a company's value by comparing the financial ratios of the target company with those of the comparable companies, or the market
multiples with those of comparable transactions. Subsequently, analysis and calculation of the target company's recent operating
performance correspond to market value according to the adjustments of the target company as a result of the discrepancy between
the target company and the comparable companies or comparable transactions.
II. Income
Approach: For example, cash flow analysis may be used to convert the target company's future cash flow into corporate value, through
the capitalization or discounting process, based on the cash flow generated by the target company's future operation.
III. Asset
Approach: Based on the book value of the target company, the total value of the individual assets and liabilities of the target
company is evaluated to reflect the overall value of the target company. When applying this approached, the fair market value of
each asset and liability, transaction costs and taxation should also be taken into consideration.
(2) Selection of the methods of
evaluation
When evaluating the reasonable stock
value of the Target Company, besides reviewing the relevant financial data of the Target Company, to reflect the recent situation
of the overall industry, the performance of comparable companies was also taken into consideration in preparing this opinion. Due
to the failure to obtain the financial forecast of the Target Company, it is not possible to take the income approach in assessing
the corporate value. In addition, considering that the operating model and asset structure of the company are not applicable to
the Tender Offer, the Independent Expert chose to use the market approach, and the price-book ratio approach and the price-earnings
ratio approach under the comparable companies approach, and also took the non-quantitative adjustment factors into consideration,
as the basis for evaluating the fairness of the Tender Offer price for the Bidder to acquire the Target Company's shares by Tender
Offer.
|
|
Comparison on the financial condition, profit
status, and price-to-earnings ratio between the Target Company and those of TWSE- or TPEx-listed companies in the same industry.
|
As the Target Company is categorized as Computer
& Peripheral Equipment-related stock on the TWSE, in consideration of the similarity of industry and product, and for avoidance
of influence of company's scale and operating performance, the following 5 companies are selected from the Target Company's industry
peers as comparable companies: Posiflex Technology Inc. (TWSE ticker: 8114; hereinafter, "Posiflex"), Ibase Technology
Inc. (TWSE ticker: 8050; "Ibase"), Ennoconn Corporation (TWSE ticker: 6414; "Ennoconn"), Advantech Intelligent
Services Co., Ltd. (TWSE ticker: 2395; "Advantech") and Flytech Technology Co., Ltd. (TWSE ticker: 6206; "Flytech").
The financial information of the above-mentioned
comparable companies is listed below according to the publicly available information from Market Observation Post System (MOPS).
(1) Condensed Consolidated Balance Sheet
as of September 30, 2019
Units: 1,000s of New Taiwan Dollars (NT$1,000)
|
(Translation, for reference only)
|
|
(2) Condensed Consolidated Comprehensive
Income Statement for the First Three Quarters of 2019
Units: 1,000s of New Taiwan Dollars (NT$1,00
|
|
|
|
|
|
|
|
If an appraisal report issued by an appraisal
institution is taken into account when determining the tender offer price, please provide the content and conclusion of such appraisal
report.
|
Not applicable.
|
|
If assets or equity of the Target Company,
or of the surviving company after merger, are used as collateral for the Bidder’s repayment plan, please provide the evaluation
of impact on the soundness of the financial condition or business operations of the Target Company or surviving company after merger.
|
Not applicable.
|
(Translation, for reference only)
|
|
X.
|
SPECIFIC MATTERS WHICH SHOULD BE INCLUDED IN THIS
PROSPECTUS
|
|
|
1.
|
Attorney's legal opinion. (Please refer to Annex 3).
|
|
|
2.
|
An evidentiary document proving that the Bidder has
the financial ability to pay the consideration of this ROC Offer, as prescribed under Article 9(III) of the Regulations Governing
Public Tender Offers for Securities of Public Companies (Please refer to the Annex 4).
|
|
|
3.
|
Evaluation reports or opinions issued by other experts:
|
With
respect to the Fairness Opinion regarding this ROC Offer issued by an independent expert, please refer to Annex 2.
The
experts issuing the above opinions, evidentiary document, or evaluation reports have signed or chopped on this prospectus for
the parts they are responsible for pursuant to Article 13-1 of the Regulations Governing Information to be Published in Public
Tender Offer Prospectus, as shown in Annexes 2, 3, and 4.
(Translation, for reference only)
|
|
XI.
|
OTHER MATERIAL INFORMATION AND RELEVANT EXPLANATION:
|
With respect to the
Bidder purchasing the Common Shares of the Target Company through the tender offer, below please find the explanation regarding
whether this transaction should be filed with the FSC for registration and publicly announced in accordance with Article 43-1(I)
of the Securities and Exchange Act, or whether this transaction is for the purpose of merger and acquisition and thus should be
reported pursuant to Article 27(XIV) of the Business Mergers and Acquisitions Act.
|
|
1.
|
Article 43-1(I) of the Securities and Exchange Act stipulates that "Where
any person individually or jointly with other person(s) acquires more than 10% of the total issued shares of a public company shall
report such acquisition to the competent authority and make a public announcement; the same applies when there is any change to
the reported matters. Regulations governing the reporting of the number of shares acquired, the purpose and the sources of funds
for the acquisition, changes to the reported matters, public announcement, terms, and any other matters, shall be prescribed by
the competent authority."
|
|
|
2.
|
Article 27(XIV) of the Business Mergers and Acquisitions Act stipulates that
"For the purpose of the merger and acquisition to acquire more than 10% of the total issued shares of a public company, the
acquirer shall report to the competent securities authority regarding the purpose of such merger and acquisition and other matters
required for reporting by the competent securities authority within 10 days after the acquisition; if the matters required for
reporting are changed, they shall be updated immediately."
|
|
|
3.
|
The Bidder plans to acquire between 10,874,863 and 65,249,177 shares via this
ROC Offer, representing 5.0% to 30.0% of the total issued and outstanding share capital of the Target Company (equal to 217,497,257
shares, including 14,707,559 shares of private placements). Since the purpose of this ROC Offer is to build a strategic partnership
between the Bidder and the Target Company, and since the Bidder and the Target Company expect to achieve complementary advantages
and hope to jointly satisfy the need for digital transformation from automation to intelligence for customers in multiple fields,
and NOT for the purpose of merger and acquisition. After completion of this ROC Offer, the Bidder will file a registration statement
with the FSC and make a public disclosure in accordance with Article 6 of the Regulations Governing the Declaration of Acquisition
of Shares under Article 43-1(I) of the Securities and Exchange Act.
|
Annex
1 _ Board Meeting Minutes of the Bidder
(Translation,
for reference only)
AU
Optronics Corp.
2nd Board
Meeting of 2020
Board Meeting Minutes
February 5, 2020
Annex
1 _ Board Meeting Minutes of the Bidder
(Translation,
for reference only)
AU
Optronics Corp. 2nd Board Meeting of 2020 Board Meeting Minutes
|
|
1.
|
Time:
5.10 p.m. on February 5, 2020
|
|
|
2.
|
Location:
Meeting Room T901 at Hsinchu Headquarter of AU Optronics Corp. (Address: No. 1, Li-Hsin Rd. 2, Hsinchu Science Park, Hsinchu City
30078, Taiwan)
|
|
|
3.
|
Director in present:
Shuang-Lang (Paul) Peng, Kuen-Yao (K.Y.) Lee, Representative of AUO Foundation, Frank Ko, Representative of BenQ Foundation, Peter
Chen, Chin-Bing (Philip) Peng (independent director), Mei-Yueh Ho (independent director), Yen-Shiang Shih (independent director),
Yen-Hsueh Su (independent director), and Jang-Lin (John) Chen (independent director).
|
Absent
Director: None.
Others
in attendance: Jack Chuang (Financial Planning Division)
Benjamin
Tseng (Board Secretary)
|
|
4.
|
Chairman:
Shuang-Lang(Paul) Peng
|
Minutes
taker: Benjamin Tseng
Annex
1 _ Board Meeting Minutes of the Bidder
(Translation,
for reference only)
[Omitted]
【1st
Proposal】
The Company
plans to acquire the common shares of ADLINK TECHNOLOGY INC. by tender offer
|
|
A.
|
To enhance
the competitiveness, the Company plans to cooperate with ADLINK TECHNOLOGY INC. ("ADLINK"
or "Target Company") to establish a strategic partnership for the Industrial
and Commercial AIoT Ecosystem. The Company, according to the Regulations Governing Public
Tender Offers for Securities of Public Companies and relevant laws, plans to acquire
the common shares of ADLINK via tender offer (this "Tender Offer").
The main terms for this Tender Offer are as follows:
|
|
|
a.
|
The
maximum number of shares planned to be acquired:
|
The
amount of common shares planned to be acquired through this Tender Offer is 65,249,177 shares ("Offer Cap") of
the common shares, representing 30.0% of the total issued and outstanding share capital of the Target Company (equal to 217,497,257
shares, including 14,707,559 shares of private placement shares) ("Total Share Amount") as shown in the system
of commercial and industry registration profile of the Department of Commerce, the Ministry of Economic Affairs (last updated
on November 19, 2019). If the shares effectively tendered do not reach the aforesaid number but reach 10,874,863 shares (representing
5.00% of the total issued and outstanding shares, the "Minimum Shares"), the Minimum Shares condition of this
tender offer will notwithstanding be satisfied. Under the circumstance that all the conditions of this tender offer are satisfied
(including the number of the shares to be effectively tendered has reached the Minimum Shares), the Company will acquire the shares
at the maximum of the Offer Cap; if the total amount of the shares tendered exceeds the Offer Cap, the Company will purchase shares
from all the Offerees of Common Shares at a pro-rated percentage of shares
Annex
1 _ Board Meeting Minutes of the Bidder
(Translation,
for reference only)
based
on the calculation method described herein..
|
|
b.
|
The
consideration for this Tender Offer:
|
The
tender offer consideration for each common share shall be NT$57 in cash. Pursuant to Article 13 of the Regulations Governing Information
to be Published in Public Tender Offer Prospectus, the Company has retained an independent expert to issue the fairness opinion
on the consideration for this Tender Offer, attached hereto as Attachment I (i.e., fairness opinion as set forth in Annex 2 to
this prospectus). Offerees shall be responsible for their own securities transaction tax, income tax (if applicable), handling
charges of the TDCC and securities brokers, bank remittance fees, postage for registered mail, and all other necessary and reasonable
fees and taxation payable for paying the tender offer consideration. Among such fees, the handling charges of TDCC and securities
brokers are calculated separately according to the number of deposit applications made by the Offeree. In addition, Offerees who
apply for deposits through a custodian bank are not subject to the handling charges of securities brokers. If there are any additional
fees, the Company will, in accordance with applicable law, make a public announcement disclosing such additional fees. When paying
consideration to the Offeree, the Company will deduct the foregoing relevant fees and taxes, excluding income tax, and such amount
shall be rounded to the nearest whole number in New Taiwan Dollars.
|
|
c.
|
Period
of this Tender Offer:
|
The
period of accepting the application of tendering shall be 9:00 a.m. to 3:30 p.m. (Taiwan time) of each business day during the
tender offer period from February 7, 2020 to March 12, 2020 ("Period"). The Company may, according to applicable
law, report to the Financial Supervisory Commission ("FSC") and make a public announcement of an extension of
the Period, provided that the extended period shall not exceed a total of 50 days.
|
|
d.
|
Any
matter that requires the approval by or the filing with the competent authority:
|
In
accordance with Article 43-1(II) of the Securities and Exchange Act and Article 7(I) of the Regulations Governing Public Tender
Offers for Securities of Public Companies, this Tender Offer shall be filed with the FSC for registration and publicly announced.
If the Company fails to obtain the approval, permission or
Annex
1 _ Board Meeting Minutes of the Bidder
(Translation,
for reference only)
effective
filing from the competent authorities before the completion of the Period (including the extended period), the Company will not
purchase any of the shares tendered.
In
addition, since this Tender Offer does not reach the threshold of combination filing under the Fair Trade Act, the Company is
not required to make a combination filing to the Fair Trade Commission.
|
|
B.
|
In order to
proceed this Tender Offer, it is proposed that the board of directors authorize the chairman
to handle all necessary procedures in relation to this Tender Offer and to take necessary
actions in representation of the Company, including, but not limited to, preparation
and execution of the Public Tender Offer Prospectuses, negotiation, execution and delivery
of all relevant documents and agreements, and submission of relevant applications or
filings to the competent authorities; and to handle all relevant matters with full authority
if this Tender Offer is in need of amendment (including, but not limited to, extension
of the period) due to the instruction of the competent authorities, market conditions,
changes of the objective environment, insufficient time to obtain the approval, permission
or effective filing from the competent authorities, or any other justifiable reason.
|
|
|
C.
|
Please kindly
be reminded that, if any director of the Company also serves as the director of Target
Company or holds the shares of Target Company, the relevant rules for avoidance of conflict
of interests and explanation of personal interest as stipulated in the Company Act, the
Regulations Governing Procedure for Board of Directors Meetings of Public Companies,
and Article 9 of the Company's Procedure for Board of Directors Meetings shall be strictly
followed.
|
|
|
D.
|
This proposal
was resolved by the audit committee on February 5, 2020.
|
Resolution:
This Tender
Offer was explained in details by the Chief Financial Officer, Benjamin Tseng. After the discussion by the directors in present,
this proposal was resolved and approved without any revision thereto. The relevant explanations of this Tender Offer will be provided
in the consolidated financial statement and the individual financial statements of 2019.
|
|
7.
|
Extemporary Motions:
None
|
Annex
1 _ Board Meeting Minutes of the Bidder
(Translation,
for reference only)
Adjournment
Annex
2 _ Fairness Opinion on the Tender Offer Consideration
(Translation,
for reference only)
Tender
Offer for Common Shares of ADLINK TECHNOLOGY INC.
by AU
Optronics Corp
Fairness
Opinion on Tender Offer Price Issued by an Independent Expert
Annex
2 _ Fairness Opinion on the Tender Offer Consideration
(Translation,
for reference only)
Tender
Offer for Common Shares of ADLINK TECHNOLOGY INC.
by AU
Optronics Corp
Fairness
Opinion on Tender Offer Price Issued by an Independent Expert
AU Optronics
Corp. ("AUO") engaged Ji-Sheng Qiu of Crowe (TW) CPAs ("Independent Expert") to issue a fairness
opinion on the tender offer price, in accordance with Article 13 of Regulations Governing Information to be Published in Public
Tender Offer Prospectus, for its tender offer to purchase the common shares of a TWSE-listed company, ADLINK TECHNOLOGY INC. (ticker:
6166, "ADLINK" or "Target Company") ("Tender Offer").
The Independent
Expert was engaged by AUO to issue the fairness opinion on the Tender Offer price as of the valuation date of January 20, 2020.
There will be material changes if the valuation purposes, assumption basis or valuation dates vary.
This opinion
only serves as an internal decision-making reference for the board of directors and audit committee of AUO; and this opinion may
not be used for any other purposes other than the aforesaid purpose. The Independent Expert does not participate in the Tender
Offer and the planning thereof between AUO and ADLINK, and the valuation on the Tender Offer price is provided by the Independent
Expert in an impartial and independent manner. The analysis adopted in this opinion focuses on the proposed Tender Offer price,
without implementing any verification or comparison procedures, and thus will not reflect any material errors on the information
provided by AUO. This opinion is made based on public information and information obtained from AUO, which has been assessed the
reasonableness and reliability by the Independent Expert. The Independent Expert does not guarantee that his opinion herein will
remain the same if there is any change to the terms and conditions of the Tender Offer or other events which may have impacts
on this opinion.
|
|
I.
|
Background
of the Target Company
|
Founded
in August, 1995 and listed in November, 2004 on the TWSE, ADLINK is currently active in the manufacturing and sale of the hardware,
the software and the applications of industrial PCs. The revenues of the major business divisions of 2018 are as follows:
Annex
2 _ Fairness Opinion on the Tender Offer Consideration
(Translation,
for reference only)
Units:
1,000s of New Taiwan Dollars (NT$1,000)
|
Department
|
Revenue
in Year 2018
|
Percentage
of Total Revenue
|
|
IOT
Strategic Solutions and Technology Division
|
2,006,654
|
19%
|
|
Embedded
Platform and Module Division
|
5,676,440
|
54%
|
|
Network
Communication and Public Construction Business Division
|
2,613,370
|
25%
|
|
Others
|
180,644
|
2%
|
|
Total
|
10,477,108
|
100%
|
Source
of Data: 2018 Annual Report of ADLINK
|
|
(1)
|
Condensed
Consolidated Balance Sheet
|
Units: 1,000s of New Taiwan Dollars (NT$1,000)
|
Year
Item
|
September
30, 2019
|
December
31, 2018
|
December
31, 2017
|
|
Current
Assets
|
6,273,425
|
6,199,027
|
5,633,199
|
|
Non-Current
Assets
|
1,980,591
|
2,080,245
|
2,166,470
|
|
Total
Assets
|
8,254,016
|
8,279,272
|
7,799,669
|
|
Current
Liabilities
|
3,499,280
|
3,410,591
|
3,083,453
|
|
Non-Current
Liabilities
|
150,299
|
300,195
|
90,237
|
|
Total
Liabilities
|
3,649,579
|
3,710,786
|
3,173,690
|
|
Issued
Capital
|
2,175,205
|
2,175,232
|
2,175,232
|
|
Additional
Paid-In Capital
|
1,509,970
|
1,553,448
|
1,575,041
|
|
Retained
Earnings
|
1,046,538
|
965,217
|
1,024,411
|
|
Other
Equity
|
(137,895)
|
(135,895)
|
(158,501)
|
|
Equity
Attributed to Owner of
the
Parent
|
4,593,818
|
4,558,002
|
4,616,183
|
|
Non-Controlling
Interests
|
10,619
|
10,484
|
9,796
|
|
Total
Equity
|
4,604,437
|
4,568,486
|
4,625,979
|
|
Book
Value Per Share (“BPS”)
|
21.12
|
20.95
|
21.22
|
Source
of Data: Market Observation Post System (MOPS)
Annex
2 _ Fairness Opinion on the Tender Offer Consideration
(Translation,
for reference only)
|
|
(2)
|
Condensed
Consolidated Comprehensive Income Statement
|
Units:
1,000s of New Taiwan Dollars (NT$1,000)
|
Year
Item
|
2019
Q1-Q3
|
2018
|
2017
|
|
Operating
Revenue
|
7,621,234
|
10,477,108
|
10,667,894
|
|
Operating
Cost
|
4,531,593
|
6,750,806
|
6,704,114
|
|
Gross
Profit
|
3,089,641
|
3,726,302
|
3,963,780
|
|
Unrealized
Sale Profits (Loss)
|
171
|
(565)
|
310
|
|
Gross
Profit
Revenue
(Loss)
|
3,089,470
|
3,726,867
|
3,963,470
|
|
Operating
Expenses
|
2,631,103
|
3,436,990
|
3,488,484
|
|
Operating
Income
|
458,367
|
289,877
|
474,986
|
|
Non-Operating
Income and Expenses
|
(37,795)
|
12,152
|
30,613
|
|
Profit
before IncomeTax
|
420,572
|
302,029
|
505,599
|
|
Income
Tax Expense
|
100,200
|
57,420
|
115,384
|
|
Profit
|
320,372
|
244,609
|
390,215
|
|
Other
Comprehensive Income (Net)
|
(2,297)
|
20,531
|
(85,674)
|
|
Total
Comprehensive Income (Loss)
|
318,075
|
265,140
|
304,541
|
|
Profit
Attributed to Owner of the Parent
|
320,596
|
244,442
|
388,858
|
|
Profit
(Loss) Attributed To Non-Controlling Interests
|
(224)
|
167
|
1,357
|
|
Total
Comprehensive Income Attributed to Owner of the Parent
|
317,940
|
264,452
|
303,584
|
|
Total
Comprehensive Income Attributed to Non-Controlling Interests
|
135
|
688
|
957
|
|
Basic
Earnings Per Share ("EPS")
|
1.47
|
1.12
|
1.79
|
Source
of Data: Market Observation Post System (MOPS)
Annex
2 _ Fairness Opinion on the Tender Offer Consideration
(Translation,
for reference only)
|
|
II.
|
Valuation
Methodology
|
|
|
1.
|
Explanations
on Valuation Approaches
|
Based
on the scholars' perspectives and theories, the following three valuation approaches are commonly used when evaluating a company's
value:
|
|
(1)
|
Market
Approach: This includes market value analysis, comparable company analysis and comparable
transaction analysis. This approach analyzes a company's value by comparing the financial
ratios of the target company with those of the comparable companies, or the market multiples
with those of comparable transactions. Subsequently, analysis and calculation of the
target company's recent operating performance correspond to market value according to
the adjustments of the Target Company as a result of the discrepancy between the target
company and the comparable companies or comparable transactions.
|
|
|
(2)
|
Income
Approach: For example, cash flow analysis may be used to convert the target company's
future cash flow into corporate value, through the capitalization or discounting process,
based on the cash flow generated by the Target Company's future operation.
|
|
|
(3)
|
Asset
Approach: Based on the book value of the Target Company, the total value of the individual
assets and liabilities of the Target Company is evaluated to reflect the overall value
of the target company. When applying this approached, the fair market value of each asset
and liability, transaction costs and taxation should also be taken into consideration.
|
|
|
2.
|
Selection
of Comparable Companies in the Same Industry
|
As
ADLINK is categorized as Computer & Peripheral Equipment-related stock on the TWSE, in consideration of the similarity of
industry and product, and for avoidance of influence of company's scale and operating performance, the following 5 companies are
selected from ADLINK's industry peers as comparable companies: Posiflex Technology Inc. (TWSE ticker: 8114; hereinafter, "Posiflex"),
Ibase Technology Inc. (TWSE ticker: 8050; "Ibase"), Ennoconn Corporation (TWSE ticker: 6414; "Ennoconn"),
Advantech Intelligent Services Co., Ltd. (TWSE ticker: 2395; "Advantech") and Flytech Technology Co., Ltd. (TWSE
ticker: 6206; "Flytech").
The
financial information of the above-mentioned comparable companies is listed below according to the publicly available information
from Market Observation Post System (MOPS).
Annex
2 _ Fairness Opinion on the Tender Offer Consideration
(Translation,
for reference only)
|
|
(1)
|
Condensed
Consolidated Balance Sheet as of September 30, 2019
|
Units: 1,000s
of New Taiwan Dollars (NT$1,000)
|
Company
Item
|
Posiflex
|
Ibase
|
Ennoconn
|
Advantech
|
Flytech
|
|
Current
Assets
|
5,974,751
|
3,014,192
|
52,687,598
|
25,448,221
|
4,014,712
|
|
Non-Current
Assets
|
8,579,282
|
4,503,137
|
32,845,256
|
19,942,374
|
1,674,751
|
|
Total
Assets
|
14,554,033
|
7,517,329
|
85,532,854
|
45,390,595
|
5,689,463
|
|
Current
Liabilities
|
4,826,856
|
2,138,759
|
37,984,957
|
11,711,372
|
1,020,581
|
|
Non-Current
Liabilities
|
6,677,512
|
106,256
|
20,029,104
|
2,707,977
|
127,611
|
|
Total
Liabilities
|
11,504,368
|
2,245,015
|
58,014,061
|
14,419,349
|
1,148,192
|
|
Issued
Capital
|
749,218
|
1,765,164
|
835,745
|
6,999,230
|
1,430,623
|
|
Additional
Paid In Capital
|
729,663
|
1,763,704
|
6,339,752
|
7,401,279
|
674,247
|
|
Retained
Earnings
|
1,469,517
|
1,600,869
|
1,779,672
|
16,913,032
|
2,190,276
|
|
Other
Equity
|
(70,085)
|
(58,369)
|
(583,507)
|
(825,090)
|
(47,968)
|
|
Treasury
Shares
|
-
|
(153,087)
|
(235,940)
|
-
|
-
|
|
Equity
Attributable to Owner of
the
Parent
|
2,878,313
|
4,918,281
|
8,135,722
|
30,488,451
|
4,247,178
|
|
Non-Controlling
Interests
|
171,352
|
354,033
|
19,383,071
|
482,795
|
294,093
|
|
Total
Equity
|
3,049,665
|
5,272,314
|
27,518,793
|
30,971,246
|
4,541,271
|
|
BPS
|
38.42
|
28.38
|
98.13
|
43.56
|
29.69
|
Annex
2 _ Fairness Opinion on the Tender Offer Consideration
(Translation,
for reference only)
|
|
(2)
|
Condensed Consolidated Comprehensive Income Statement for the First Three Quarters of 2019
|
Units: 1,000s of New Taiwan Dollars (NT$1,000)
|
Company
Item
|
Posiflex
|
Ibase
|
Ennoconn
|
Advantech
|
Flytech
|
|
Operating Revenue
|
7,303,330
|
2,714,026
|
56,963,557
|
40,658,886
|
4,065,452
|
|
Operating Cost
|
4,800,582
|
2,012,534
|
43,990,428
|
24,827,416
|
2,657,920
|
|
Gross Profit
|
2,502,748
|
701,492
|
12,973,129
|
15,831,470
|
1,407,532
|
|
Unrealized Sale Profits
|
146
|
178
|
-
|
-
|
-
|
|
Gross Profit
Revenue (Loss)
|
2,502,602
|
701,314
|
12,973,129
|
15,831,470
|
1,407,532
|
|
Operating Expenses
|
1,773,182
|
580,584
|
10,808,016
|
9,007,877
|
717,224
|
|
Operating Income
|
729,420
|
120,730
|
2,165,113
|
6,823,593
|
690,308
|
|
Non-Operating Income and Expenses
|
(144,631)
|
79,965
|
343,440
|
371,523
|
11,610
|
|
Profit before Income Tax
|
584,789
|
200,695
|
2,508,553
|
7,195,116
|
701,918
|
|
Income Tax Expense
|
190,763
|
13,950
|
524,349
|
1,505,602
|
129,155
|
|
Profit
|
394,026
|
186,745
|
1,984,204
|
5,689,514
|
572,763
|
|
Other Comprehensive Income (Net)
|
16,113
|
24,308
|
(129,761)
|
(46,008)
|
(7,318)
|
|
Total Comprehensive Income
|
410,139
|
211,053
|
1,854,443
|
5,643,506
|
565,445
|
|
Profit Attributable to Owners of the Parent
|
371,248
|
182,919
|
710,078
|
5,651,450
|
578,910
|
Annex
2 _ Fairness Opinion on the Tender Offer Consideration
(Translation,
for reference only)
|
Company
Item
|
Posiflex
|
Ibase
|
Ennoconn
|
Advantech
|
Flytech
|
|
Profit
Attributable to Non-Controlling Interests
|
22,778
|
3,826
|
1,274,126
|
38,064
|
(6,147)
|
|
Total
Comprehensive Income Attributable to
Owners
of the Parent
|
393,985
|
206,204
|
511,023
|
5,601,114
|
571,286
|
|
Total
Comprehensive Income Attributable to
Non-Controlling
Interests
|
16,154
|
4,849
|
1,343,420
|
42,392
|
(5,841)
|
|
EPS
|
4.96
|
1.52
|
8.73
|
8.08
|
4.05
|
|
|
|
|
|
|
3.
|
The
Selection of the Valuation Approaches
|
When
evaluating the reasonable stock value of ADLINK, besides reviewing the relevant financial data of the Target Company, to reflect
the recent situation of the overall industry, the performance of comparable companies was also taken into consideration in preparing
this opinion. Due to the failure to obtain the financial forecast of the Target Company, it is not possible to take the income
approach in assessing the corporate value. In addition, considering that the operating model and asset structure of the company
are not applicable to the Tender Offer, the Independent Expert chose to use the market approach, and the price-book ratio approach
and the price-earnings ratio approach under the comparable companies approach, and also took the non-quantitative adjustment factors
into consideration, as the basis for evaluating the fairness of the Tender Offer price for AUO to acquire ADLINK's shares by Tender
Offer.
|
|
III.
|
The
Calculation of the Stock Value
|
Since
ADLINK is a TWSE-listed company and has objective transaction prices in the public market, this opinion takes the average closing
prices on the last 5, 10, 20, 30, and 60 trading days before January 20, 2020 (inclusive) for reference as the recent transaction
prices in calculation of the reasonable stock value of ADLINK as follows:
Annex
2 _ Fairness Opinion on the Tender Offer Consideration
(Translation,
for reference only)
Units: New
Taiwan Dollars (NT$)
|
Item
|
Average
closing price
|
Range
of theoretical price per share
|
|
Last
5 trading days
|
49.86
|
47.45
- 49.86
|
|
Last
10 trading days
|
48.48
|
|
Last
20 trading days
|
48.13
|
|
Last
30 trading days
|
47.67
|
|
Last
60 trading days
|
47.45
|
(Source of
Data: Simple arithmetic mean of the closing price published by the TWSE)
|
|
2.
|
Comparable
Companies Approach
|
Referencing
the BPS and EPS as shown in ADLINK's financial reports, and the Price Book Ratio ("P/B") and Price-Earnings Ratio
("P/E") of Posiflex, Ibase, Ennoconn, Advantech, and Flytech, all of which are TWSE-listed or TPEx-listed companies
in the same industry, as shown on their latest financial statements, this opinion calculates the reasonable value per ADLINK's
share.
The average
closing price on the last 5, 10, 20, 30, and 60 trading days before the benchmark date, January 20, 2020 (inclusive), and the
BPS and EPS of each company are as follows:
Units: New
Taiwan Dollars (NT$)
|
Comparable
companies in the same industry
|
Average
closing price of shares
(Note)
|
BPS
(Sep 30, 2019)
|
EPS
(Oct 1, 2018 – Sep 30, 2019)
|
|
Last
5 trading days
|
Last
10 trading days
|
Last
20 trading days
|
Last
30 trading days
|
Last
60 trading days
|
|
Posiflex
|
103.20
|
103.65
|
104.23
|
103.83
|
103.26
|
38.42
|
6.06
|
|
Ibase
|
44.75
|
44.79
|
44.54
|
44.75
|
44.99
|
28.38
|
1.65
|
|
Ennoconn
|
256.00
|
252.10
|
251.03
|
252.12
|
246.06
|
98.13
|
12.80
|
|
Advantech
|
312.40
|
308.00
|
306.03
|
303.72
|
305.26
|
43.56
|
10.42
|
|
Flytech
|
73.84
|
73.42
|
72.75
|
72.07
|
70.97
|
29.69
|
5.00
|
(Note: Simple
arithmetic mean of the closing price published by the TWSE and TPEx)
Annex
2 _ Fairness Opinion on the Tender Offer Consideration
(Translation,
for reference only)
|
|
(1)
|
Price-Book
Ratio Approach
|
Taking
the average closing price of the entities in the same industry over the recent 5, 10, 20, 30, and 60 trading days before the benchmark
date, January 20, 2020 (inclusive) for reference, and calculating the P/B of the entities in the same industry based on each company's
BPS on September 30, 2019, the reasonable reference price for ADLINK's equity per share is as follows:
|
Entity
of the same industry
|
Posiflex
|
IBASE
|
Ennoconn
|
Advantech
(Note)
|
Flytech
|
Average
P/B
|
|
P/B
calculated using the average closing price of last 5 trading days
|
2.69
|
1.58
|
2.61
|
7.17
|
2.49
|
2.34
|
|
P/B
calculated using the average closing price of last 10 trading days
|
2.70
|
1.58
|
2.57
|
7.07
|
2.47
|
2.33
|
|
P/B
calculated using the average closing price of last 20 trading days
|
2.71
|
1.57
|
2.56
|
7.03
|
2.45
|
2.32
|
|
P/B
calculated using the average closing price of last 30 trading days
|
2.70
|
1.58
|
2.57
|
6.97
|
2.43
|
2.32
|
|
P/B
calculated using the average closing price of last 60 trading days
|
2.69
|
1.59
|
2.51
|
7.01
|
2.39
|
2.30
|
|
Range
of P/B
|
2.30
- 2.34
|
(Note: The
P/B of Advantech deviates from the norm and is considered to be excluded from the evaluation)
Units: New
Taiwan Dollars (NT$)
|
Item
|
Description
|
|
Range
of multiplier
|
2.30
- 2.34 times
|
|
ADLINK's
BPS as of Sep. 30, 2019
|
21.12
|
|
Range
of theoretical price
|
48.58
- 49.42
|
Annex
2 _ Fairness Opinion on the Tender Offer Consideration
(Translation,
for reference only)
|
|
(2)
|
Price-Earnings
Ratio Approach
|
Taking
the average closing price of the entities in the same industry over the last 5, 10, 20, 30, and 60 trading days before the benchmark
date, January 20, 2020 (inclusive) for reference, and calculating the P/E of the entities in the same industry based on each company's
EPS of the most recent year (from October 1, 2018 to September 30, 2019), the reasonable reference price for ADLINK's equity per
share is as follows:
|
Entity
of the same industry
|
Posiflex
|
Ibase
|
Ennoconn
|
Advantech
|
Flytech
|
Average
P/E
|
|
P/E
calculated using the average closing price of last 5 trading days
|
17.03
|
27.12
|
20.00
|
29.98
|
14.77
|
21.78
|
|
P/E
calculated using the average closing price of last 10 trading days
|
17.10
|
27.15
|
19.70
|
29.56
|
14.68
|
21.64
|
|
P/E
calculated using the average closing price of last 20 trading days
|
17.20
|
26.99
|
19.61
|
29.37
|
14.55
|
21.54
|
|
P/E
calculated using the average closing price of last 30 trading days
|
17.13
|
27.12
|
19.70
|
29.15
|
14.41
|
21.50
|
|
P/E
calculated using the average closing price of last 60 trading days
|
17.04
|
27.27
|
19.22
|
29.30
|
14.19
|
21.40
|
|
Range
of P/E
|
21.40
- 21.78
|
Annex
2 _ Fairness Opinion on the Tender Offer Consideration
(Translation,
for reference only)
Units: New
Taiwan Dollars (NT$)
|
Item
|
Description
|
|
Range
of multiplier
|
21.40
- 21.78 times
|
|
ADLINK's
EPS of the most recent year
(from
Oct. 1, 2018 to Sept. 30, 2019)
|
2.00
|
|
Range
of theoretical price
|
42.80
- 43.56
|
|
|
|
|
|
|
3.
|
Non-Quantitative
Adjustment Factors
|
Taking
into consideration the premium cases of tender offer completed since 2018, excluding the cases where the company acquired was
delisted after the acquisition and the cases where the premium rate deviated from the norm, and taking the first quartile of the
equity premium rate as a lower limit, the third quartile as an upper limit of the range of non-quantitative adjustment, the premium
cases of tender offer are as follows:
|
No.
|
Offeror
|
Company
Acquired
|
Ticker
of the Company Acquired
|
Date
of Filing
|
Premium
rate
(Note)
|
|
1
|
Energy
Absolute
|
Amita
Technologies Inc.
|
5233
|
2018/02/21
|
16.40%
|
|
2
|
Utechzone
Co., Ltd.
|
Favite
Inc.
|
3535
|
2018/02/22
|
26.26%
|
|
3
|
Ennoconn
International Investment Co., Ltd.
|
Marketech
International Corp.
|
6196
|
2018/04/03
|
31.26%
|
|
4
|
Nitto
Boseki
|
Baotek
Industrial Materials Ltd.
|
5340
|
2018/04/27
|
7.21%
|
|
6
|
Mao-Mao-Chung
Capital Co., Ltd.
|
Ta
Ching Securities Co., Ltd,
|
6021
|
2018/08/21
|
33.60%
|
|
7
|
Nidec
Corp.
|
Chaun
Choung Technology Corp.
|
6230
|
2018/10/02
|
17.23%
|
|
8
|
Seven
people, including
Be
Empire Capital Corp.
|
Kuangli
Photoelectric Technology Co., Ltd.
|
6431
|
2018/12/05
|
28.11%
|
|
9
|
Sanbayashi
|
Dingzing
Advanced Materials Inc.
|
6585
|
2018/12/10
|
19.81%
|
|
10
|
Cayenne
Entertainment Technology Co., Ltd.
|
Cayenne's
Ark Mobile Co., Ltd.
|
6611
|
2018/12/21
|
5.77%
|
|
11
|
Wpg
Holdings Limited
|
Wt
Microelectronics Co., Ltd.
|
3060
|
2019/11/12
|
28.40%
|
|
Premium
rate of the first quartile
|
16.61%
|
|
Premium
rate of the third quartile
|
28.33%
|
(Note: The
premium rate is (Purchase price – Share price 30 days before the filing date)/ (Share price 30 days before the filing date))
(Source
of Data: MOPS)
Annex
2 _ Fairness Opinion on the Tender Offer Consideration
(Translation,
for reference only)
|
|
4.
|
Summary
of the Evaluation of the Equity Value
|
Taking
the results of the foregoing valuation methodology into reference, since ADLINK is a TWSE-listed company and has objective transaction
prices in the public market, and the method of acquiring the equity is a tender offer, the Independent Expert gives the market
approach greater weight, and gives the remaining two approaches lesser weight since the two approaches are based on the market
prices of comparable companies. In addition, further taking into account the non-quantitative adjustment of the premium rate in
the tender offer cases in adjusting the price per share, the Independent Expert estimates the reasonable range of ADLINK's equity
value in the Tender Offer is as follows:
Units: New
Taiwan Dollars (NT$)
|
Valuation
Approaches
|
Range
of price per share
|
Weight
|
Range
of premium rate
|
Range
of theoretical price per share
|
|
Market
Approach
|
47.45
- 49.86
|
70%
|
16.61%
- 28.33%
|
54.72
- 62.69
|
|
Comparable
Companies Approach (Price-Book Ratio Approach)
|
48.58
- 49.42
|
15%
|
|
Comparable
Companies Approach (Price-Earnings Ratio Approach)
|
42.80
- 43.56
|
15%
|
Annex
2 _ Fairness Opinion on the Tender Offer Consideration
(Translation,
for reference only)
IV. Conclusion
of the Evaluation
To sum up,
after considering the quantitative financial data and objective market data, and based on the market approach, and the price-book
ratio approach, and price-earnings ratio approach under the comparable companies approach, and also taking into account the premium
rate in the tender offer cases, the reasonable range of ADLINK's per-share value is between NT$54.72 and 62.69. Therefore, since
AUO intends to purchase the common shares of ADLINK via the Tender Offer at a consideration of NT$57.00 per share, which is within
the range of the per-share value assessed above, the Tender Offer price is fair and reasonable.
Crowe (TW)
CPAs
Accountant:
Ji-Sheng Qiu
Date: January
22, 2020
Annex
2 _ Fairness Opinion on the Tender Offer Consideration
(Translation,
for reference only)
Accountant Resume
Name: Ji-Sheng
Qiu
Certificates:
Taiwan CPA
Education:
Bachelor
of Statistics, National Cheng Kung University
Master of
Accounting, Soochow University
Graduate
Credits Courses Program, Department of Law, National Taipei University
Experience:
Manager,
Deputy Manager of First Horwath & Company CPAs
Senior Manager
of Diwan & Company
Accountant
of First Horwath & Company CPAs
Present
Job:
Partner
Accountant of Crowe (TW) CPAs
Director
and Lecturer of Taipei Accounting Association
Annex
2 _ Fairness Opinion on the Tender Offer Consideration
(Translation,
for reference only)
Independence
Declaration
I, as an
accountant, have accepted the appointment by AU Optronics Corp. and issued a fairness opinion on the tender offer price in connection
with the tender offer for common shares of ADLINK TECHNOLOGY INC.
In order
to perform the above-mentioned duties, I hereby declare that I am NOT subject to any of the following conditions:
|
|
1.
|
I (or my
spouse) am employed by the issuing company or its underwriter in a regular position and
receives regular salary payments.
|
|
|
2.
|
I (or my
spouse) was an employee of the issuing company or its underwriter and has left the company
within the past two years.
|
|
|
3.
|
the company
where I (or my spouse) am employed is a related party to the issuing company or its underwriter.
|
|
|
4.
|
I am the
spouse or a relative within the second degree of relationship of the legal representative
or manager of the issuing company or its underwriter.
|
|
|
5.
|
I (or my
spouse) maintain an investment in or profit-sharing relationship with the issuing company
or its underwriter.
|
|
|
6.
|
I am a
director, supervisor or the spouse or a relative within the second degree of relationship
of the director or supervisor of Taiwan Stock Exchange Corporation.
|
|
|
7.
|
the company
where I (or my spouse) am employed maintains a business relationship with the issuing
company.
|
For the
purpose of AU Optronics Corp.’s intention to make a tender offer to purchase the common shares of ADLINK TECHNOLOGY INC,
the fairness opinion issued by me has remained independent.
Crowe (TW)
CPAs
Accountant:
Ji-Sheng Qiu
Date: January
22, 2020
Annex
3 _ Attorney’s Legal Opinion
(Translation,
for reference only)
To: AU Optronics
Corp.
Date: February
6, 2020
Ref: No.
2020-00373
Subject: With
respect to the tender offer to be made by AU Optronics Corp. ("AUO") for the issued common shares of ADLINK Technology
Inc. ("ADLINK"), we hereby issue this legal opinion on the Tender Offer Report Form and the accompanying documents
prepared by AUO for said tender offer and whether such tender offer requires approval by or effective registration with any competent
authorities, pursuant to Article 9(II) of the Regulations Governing Public Tender Offers for Securities of Public Companies ("Tender
Offer Regulations").
Explanations:
|
|
I.
|
AUO intends
to conduct a tender offer for the issued and outstanding common shares of ADLINK (this
"Tender Offer"). According to Article 9(II) of the Tender Offer Regulations,
the Tender Offer Report Form and its accompanying documents shall be reviewed by a lawyer
and the lawyer shall issue a legal opinion on such documents; if any approval by or effective
registration with the FSC or any other competent authorities is required for the tender
offer, a lawyer's opinion shall concurrently be issued thereto. We are engaged by AUO
in accordance with the foregoing provision to issue this legal opinion.
|
|
|
II.
|
For
issuing this opinion, we have reviewed the following documents:
|
|
|
1.
|
the
Tender Offer Report Form prepared by AUO for this Tender Offer (draft of February 5,
2020);
|
|
|
2.
|
the
Tender Offer Prospectus prepared by AUO for this Tender Offer (draft of February 5, 2020);
|
|
|
3.
|
a
copy of the Tender Offer Mandate Agreement entered into between AUO and the tender offer
agent, KGI Securities Co., Ltd. ("KGI"), for this Tender Offer dated
February 5, 2020;
|
|
|
4.
|
a
copy of the Confirmation Letter that AUO has the financial ability to pay the consideration
for this Tender Offer issued by WeTec International CPAs ("WeTec") dated
February 6, 2020);
|
|
|
5.
|
the
announcement of this Tender Offer to be published at the Taiwan Stock Exchange Market
Observation Post System ("MOPS") by AUO on February 6, 2020 pursuant
to Articles 7(I) and 26(I) of the Tender Offer Regulations (draft of February 5, 2020)
(this item and the above-mentioned four items are hereinafter collectively referred to
as the "Reviewed Tender Offer Report Form and Accompanying Documents");
|
|
|
6.
|
corporate
registration of ADLINK as shown in the system of commercial and industry registration
profile of the Department of Commerce, the Ministry of Economic Affairs ("MOEA")
on February 6, 2020 (the last amendment date is November 19, 2019);
|
Annex
3 _ Attorney’s Legal Opinion
(Translation,
for reference only)
|
|
7.
|
an
electronic copy of 2018 Annual Report of ADLINK obtained from the MOPS on February 6,
2020;
|
|
|
8.
|
a
certificate issued by AUO dated February 6, 2020 ("AUO Declaration");
and
|
|
|
9.
|
a
certificate issued by KGI dated February 6, 2020 ("KGI Declaration");
and
|
|
|
III.
|
This
legal opinion is based on the assumptions and qualifications set forth below:
|
|
|
1.
|
all
documents and materials submitted for our review and all information published at the
MOPS, and all information disclosed by ADLINK on the website of the Department of Commerce,
MOEA and at the MOPS are authentic, accurate and complete and the facts or information
therein are true without faults;
|
|
|
2.
|
all
documents and materials submitted for our review have been duly executed, authorized,
and delivered, and all signatures, seals, and chops thereon are genuine;
|
|
|
3.
|
AUO
has fully disclosed and provided the relevant documents and information required for
this legal opinion, and no independent search, investigation or other verification action
has been conducted by us with respect to the factual statements or representations under
the reviewed documents related to this Tender Offer;
|
|
|
4.
|
As
of the date of this legal opinion, no facts or acts may affect the effect, authenticity,
accuracy and completeness of the foregoing documents and information;
|
|
|
5.
|
The
Tender Offer Report Form and accompanying documents which AUO will file with the FSC
will include: (1) the original of the Reviewed Tender Offer Report Form and Accompanying
Documents consistent with the draft of such, (2) the original of the minutes of the meeting
of the AUO board of the directors, an independent expert's fairness opinion and other
relevant documents, included in the Tender Offer Prospectus, and (3) the original of
this legal opinion. If the FSC requires that AUO submit other accompanying documents
for this Tender Offer pursuant to Item 4 of Article 9(I) of the Tender Offer Regulations,
AUO will file such documents with the FSC.
|
|
|
6.
|
This
legal opinion is made based on the Taiwan laws and regulations effective as of the date
hereof, and we expressed no opinion on the laws of any jurisdiction other than Taiwan.
|
|
|
IV.
|
Based
on the above-mentioned documents and pursuant to the Taiwan laws and regulations, we
hereby issue this legal opinion as follows:
|
|
|
i.
|
This
Tender Offer may be conducted only after it has been reported to the FSC and publicly
announced:
|
|
|
1.
|
Article
43-1(II) of the Securities and Exchange Act ("SEA") prescribes, "Any
tender offer to purchase the securities of a public company not through the public securities
exchange market or the over-the-counter market may be conducted only after it has been
reported to the competent authorities, with the proof that the bidder has the ability
to pay the tender offer consideration, and publicly announced, except under the following
circumstances:
|
Annex
3 _ Attorney’s Legal Opinion
(Translation,
for reference only)
|
|
(1)
|
the
number of securities proposed for tender offer by the bidder plus the total number of
securities of the public company already obtained by the bidder and its related parties
do not exceed 5% of the total number of voting shares issued by the public company;
|
|
|
(2)
|
the
securities purchased by the bidder through the tender offer are securities of a company
of which the bidder holds more than 50% of the issued voting shares; or
|
|
|
(3)
|
other
circumstances in conformity with the regulations prescribed by the competent authorities."
|
|
|
2.
|
Article
43-1(III) of the SEA provides, "Where any person individually or jointly with other
person(s) intends to acquire a certain percentage of the total issued shares of a public
company or of the beneficial securities of a real estate investment trust under the Real
Estate Securitization Act, such acquisition shall be conducted by means of a tender offer,
unless certain conditions are satisfied."
|
|
|
3.
|
In
addition, Articles 7(I), 9(II) and 11(I) of the Tender Offer Regulations respectively
read, "Any tender offer to purchase the securities of a public company shall not
be made until a report has been filed with the FSC and a public announcement has been
made, except under the circumstances set forth in Items 1 to 3 of Article 43-1(II) of
the SEA," "The Tender Offer Report Form and its accompanying documents shall
be reviewed by an attorney and the attorney shall issue a legal opinion on such documents;
if any approval by or effective registration with the FSC or any other competent authorities
is required for the tender offer, a lawyer's opinion shall concurrently be issued thereto,"
and "Any person who individually or jointly with other person(s) intends to acquire
shares accounting for 20% or more of the total issued shares of a public company within
50 days shall conduct the acquisition by means of a tender offer."
|
|
|
4.
|
It
is our understanding that AUO intends to acquire 65,249,177 shares in ADLINK via this
Tender Offer, accounting for 30% of the total issued common shares of ADLINK, (i.e.,
217,497,257 shares, as most-recently updated on November 19, 2019 in the system of commercial
and industry registration profile of the Department of Commerce, MOEA). Since the number
to be acquired will account for more than 20% of the total issued shares of ADLINK, it
shall be conducted via a tender offer according to the applicable law and regulation.
Therefore, given the above provisions, this Tender Offer may be conducted only after
AUO has reported to the FSC and made public announcement.
|
Annex
3 _ Attorney’s Legal Opinion
(Translation,
for reference only)
|
|
ii.
|
The
Tender Offer Report Form and accompanying documents of this Tender Offer comply with
Article 9(I) of the Tender Offer Regulations and other applicable provisions:
|
|
|
1.
|
According
to Article 9(I), (II), and (III), and Item 2 of Article 9(IV) of the Tender Offer Regulations
and the template of the Tender Offer Report Form (for Purchase of the Securities of a
Public Company) published by the Securities and Futures Bureau of FSC ("SFB"),
the Tender Offer Report Form and accompanying documents which a bidder shall file with
the FSC include: (1) the Tender Offer Report Form, (2) the Tender Offer Prospectus, (3)
the Tender Offer Mandate Agreement entered into between the bidder and the tender offer
agent, (4) the Power of Attorney in favor of the bidder's designated representative for
litigious and non-litigious matters if the bidder does not maintain any domicile or business
place in the Republic of China (R.O.C.), (5) a lawyer's legal opinion, (6) the proof
that the bidder has the ability to pay the tender offer consideration (where the tender
offer consideration is to be paid in cash, the proof may be a written confirmation that
the bidder has the ability to pay the tender offer consideration, issued by a financial
adviser with the qualification of a securities underwriter or by a CPA that conducts
the business of auditing and attesting the financial reports of public companies, after
such adviser or CPA has gained a full understanding of the bidder and taken reasonable
steps to evaluate the bidder's sources of funds), (7) the proof that the bidder has made
public announcement at the MOPS, (8) the original of the minutes of the meeting of the
board of the directors, an independent expert's fairness opinion and other relevant documents,
included in the Tender Offer Prospectus, and (9) other accompanying documents required
by the FSC. The Reviewed Tender Offer Report Form and Accompanying Documents include
the above-mentioned items (1) to (3) and items (6) and (7), and the above-mentioned items
(5) (i.e., the original of this legal opinion), (8) and (9) are to be submitted to the
FSC when AUO reports this Tender offer to the FSC. In addition, the above-mentioned item
(4) does not apply to this Tender Offer. Therefore, the Tender Offer Report Form and
accompanying documents of this Tender Offer comply with Article 9(I) of the Tender Offer
Regulations and other applicable provisions.
|
|
|
2.
|
Regarding
the Tender Offer Prospectus and the Tender Offer Report Form of this Tender Offer:
|
|
|
(1)
|
Article
43-4(I) of the SEA prescribes, "The bidder, unless buying back its shares pursuant
to Article 28-2 of the SEA, shall deliver the Tender Offer Prospectus to the offeree
upon the offeree's request or upon the offeree's deposit of the securities with the tender
offer agent." In addition, Article 43-4(II) of the SEA provides, "The items
to be published in the Tender Offer Prospectus referred to in the preceding paragraph
shall be prescribed by the competent authorities." The FSC promulgated the Regulations
Governing Information to be Published in Public Tender Offer Prospectus ("Tender
Offer Prospectus Regulations"). Article 4 of the Tender Offer Prospectus Regulations
provides, "The Tender Offer Prospectus shall include the following information:
(1) basic information of the tender offer, (2) tender offer conditions, (3) type(s) and
source(s) of the tender offer consideration, (4) the risks associated with tendering,
(5) procedures to be followed after expiration of the period of tender offer, (6) the
bidder's shareholdings in the target company, (7) the circumstances of any other purchases
and sales by the bidder of shares in the target company, (8) the bidder's business plan
for the target company, (9) the resolution to initiate the tender offer, and a fairness
opinion, (10) matters of special note, and (11) explanation of any other material information."
|
Annex
3 _ Attorney’s Legal Opinion
(Translation,
for reference only)
|
|
(2)
|
Based
on our review, the Tender Offer Report Form of this Tender Offer is compiled in accordance
with the template of the Tender Offer Report Form (for Purchase of the Securities of
a Public Company) published by the SFB, and complies with the template of the Tender
Offer Prospectus published by the SFB and includes all items as specified in the Tender
Offer Prospectus Regulations.
|
|
|
(3)
|
Given
the above, the Tender Offer Report Form and the Tender Offer Prospectus of this Tender
Offer prepared by AUO comply with SFB's requirements and the Tender Offer Prospectus
Regulations.
|
|
|
3.
|
Regarding
the Confirmation Letter that confirms the bidder has the ability to pay the consideration
for this Tender Offer:
|
|
|
(1)
|
Article
9(III) and (IV) of the Tender Offer Regulations prescribe, "The bidder shall provide
proof that it has the ability to pay the tender offer consideration. If the tender offer
consideration is to be paid in cash, the proof under the preceding paragraph shall include
one of the items in the following subparagraphs: (1) a performance guarantee issued by
a financial institution to the tender offer agent designated as the beneficiary and authorized
to demand at its sole discretion the exercise of the performance guarantee and to instruct
the allocation of funds for the purpose of payment of the consideration, or (2) written
confirmation that the bidder has the ability to pay the tender offer consideration, issued
by a financial adviser with the qualification of a securities underwriter or by a CPA
that conducts the business of auditing and attesting the financial reports of public
companies, after such adviser or CPA has gained a full understanding of the bidder and
taken reasonable steps to evaluate the bidder's sources of funds."
|
|
|
(2)
|
According
to the Confirmation Letter that confirms AUO has the financial ability to pay the consideration
for this Tender Offer issued by WeTec, AUO remitted the consideration of this Tender
Offer in the amount of NT$3,719,203,089 to KGI’s bank account designated for the
tender offer (account name: KGI’s designated bank account for tender offer (KGI
bank, Zhongshan branch), account number: 00001118616000) on February 6, 2020. We have
reviewed the original of the Confirmation Letter and conclude that it complies with the
above-mentioned provisions.
|
|
|
4.
|
Regarding
the Tender Offer Mandate Agreement entered into between the bidder and the tender offer
agent of this Tender Offer:
|
Annex
3 _ Attorney’s Legal Opinion
(Translation,
for reference only)
|
|
(1)
|
Article
15 (I) to (III) of the Tender Offer Regulations prescribe, "A bidder shall appoint
a tender offer agent that is permitted by law to handle shareholder services for others,
to be responsible for the accepting offeree's deposit of securities, the delivery of
Tender Offer Prospectus, and the receipt and payment of the tender offer funds, securities,
etc. A tender offer agent shall set up a segregated account for the receipt and payment
of funds or securities under the preceding paragraph, and shall perform its fiduciary
duties faithfully and with due care. The tender offer agent shall meet the qualifications
and requirements as specified in the Regulations Governing the Administration of Shareholder
Services of Public Companies, and shall not have received any official reprimand or more
severe disciplinary action by the FSC in connection with tender offer business within
the most recent year. This restriction does not apply, however, if concrete steps have
been taken to correct the infraction and the FSC has recognized the improvement."
|
|
|
(2)
|
AUO
has appointed KGI to handle the above-mentioned matters for this Tender Offer and, according
to the KGI Declaration, KGI meets the qualifications and requirements specified in the
Tender Offer Regulations. Therefore, AUO has complied with the above-mentioned provisions.
|
|
|
5.
|
Given
the above, the Tender Offer Report Form and accompanying documents of this Tender Offer
comply with Article 9(I) of the Tender Offer Regulations and other applicable provisions.
|
|
|
iii.
|
The
Approval by the Investment Commission of MOEA ("IC") is not required
for this Tender Offer:
|
The
Bidder, AUO, is a company incorporated under Taiwan laws. Also, according to the AUO Declaration, to the extent that AUO may acknowledge,
no single foreigner holds more than one-third of the total issued shares of AUO. As such, there is no requirement to file with
IC for this Tender Offer in accordance with the Statute for Investment by Foreign Nationals.
|
|
iv.
|
The
Fair Trade Commission ("FTC")'s clearance is not required for this Tender
Offer:
|
|
|
1.
|
Article
10 of the Fair Trade Act ("FTA") prescribes, "The term 'combination'
as used in this Act means any of the following situations: (1) where an enterprise merges
with another enterprise, (2) where an enterprise holds or acquires the shares or capital
contributions of another enterprise to an extent of one-third of the total voting shares
or total capital of such other enterprise, (3) where an enterprise is assigned by or
leases from another enterprise the whole or the substantial part of the business or assets
of such other enterprise, (4) where an enterprise operates jointly with another enterprise
on a regular basis or is entrusted by another enterprise to operate the latter's business;
or (5) where an enterprise directly or indirectly controls the business operation or
the appointment or removal of personnel of another enterprise. In computing the shares
or capital contributions referred to in subparagraph 2 of the preceding paragraph, the
shares or capital contributions held or acquired by an enterprise that is controlled
by, controlling, or affiliated with the acquiring enterprise, and by an enterprise where
both it and the acquiring enterprise are controlled by the same enterprise or enterprises
shall be included."
|
Annex
3 _ Attorney’s Legal Opinion
(Translation,
for reference only)
|
|
2.
|
With
respect to the above Item (5) "where an enterprise directly or indirectly controls
the business operation or the appointment or discharge of personnel of another enterprise,"
according to the Letter of FTC dated November 30, 1992 (reference no. Gong-Yi-Zi-04799),
regarding controlling another enterprise, the content of control includes business operations
and personnel appointments and removals. The ability to control one of the foregoing
items would constitute the control under Item (5) of Article 6(I) of the FTA (i.e., current
Item (5) of Article 10(I) of the FTA). With respect to business operation, the control
mainly reflects the ability to decide business characterization, counterparty of purchase
and sales, and terms of transactions; with respect to personnel appointments and removals,
then it reflects in the ability to appoint and remove the management at or above the
manager level. It is not necessary to reach full-scale control to constitute the control.
Rather, a general control that may affect important business decisions or success of
another enterprise would constitute the control. Further, according to the Letter of
FTC dated October 8, 1996 (reference no. Gong-Yi-Zi-8503794-002), if an enterprise obtains
operation management of another enterprise by proxy solicitation, and then obtains seats
on a board of directors exceeding more than half of the directors and has direct or indirect
control over the business operation or personnel appointments and removals of another
enterprise, or obtains voting rights via proxy solicitation exceeding one-third of the
total shares with voting rights, such act would constitute the combination under Item
(2) or (5) of Article 6(I) of the FTA (i.e., current Item (2) or (5) of Article 10 (I)
of the FTA).
|
|
|
3.
|
AUO
contemplates to acquire aggregate 65,249,177 in ADLINK via this Tender Offer, accounting
for 30% of the total issued common shares of ADLINK. Further, according to the AUO Declaration,
upon commencing this Tender Offer, AUO and its affiliates do not hold any shares in ADLINK.
Thus, upon completion of this Tender Offer, the ADLINK shares acquired by AUO would be
less than one third of the total voting shares of ADLINK. Given the above, this Tender
Offer does not constitute the combination "where an enterprise holds or acquires
the shares or capital contributions of another enterprise to an extent of one-third of
the total voting shares or total capital of such other enterprise" as provided under
Item (2) of the Article 10(I) of the FTA.
|
|
|
4.
|
This
Tender Offer does not meet the "where an enterprise directly or indirectly controls
the business operation or the appointment or removal of personnel of another enterprise"
as provided under Item (5) of Article 10(I) of the FTA for the following reasons:
|
|
|
(1)
|
According
to the AUO Declaration, the purpose of acquisition of shares in ADLINK via this Tender
Offer is to build a strategic partnership, as agreed with ADLINK, in order to co-develop
the industrial and commercial AIoT ecosystem. Along with such cooperation, AUO and ADLINK
will continue to maintain their independent operation decisions, including, without limitation,
the counterparty and terms of its purchase and sales, and the appointment and removal
of its management personnel.
|
Annex
3 _ Attorney’s Legal Opinion
(Translation,
for reference only)
|
|
(2)
|
According
to the Tender Offer Prospectus of this Tender Offer, AUO and the Chairman of ADLINK,
Mr. Jim Liu, have entered into a shareholders’ agreement, pursuant to which Mr.
Liu agrees, after the completion of this Tender Offer, to support and cause at least
one director candidate(s) nominated by AUO to be elected as non-independent director
of ADLINK. In this regard, according to the AUO Declaration, AUO plans to nominate one
non-independent director, and thus expects to obtain one seat of directors of ADLINK.
Article 17 of the latest Articles of Incorporation of ADLINK, dated June 19, 2019, provides
that the board of directors of the company (i.e., ADLINK) shall consist of 5 to 9 directors,
including not less than 2 independent directors, and the seats of independent directors
shall comprise not less than one-fifth of the directors’ seats. As such, even if
AUO obtains 1 seat in the board of directors of ALINK, this does not exceed half of the
board of directors of ADLINK. When the directors of ADLINK vote on business operations
or personal appointment/removal proposals in the board meetings, AUO has no ability to
control the voting results.
|
|
|
(3)
|
According
to the AUO Declaration, except for the above shareholders’ agreement, there are
no other arrangements or agreements related to substantial control over the appointment
of seats in the board of directors of ADLINK or the operation decisions.
|
|
|
5.
|
This
Tender Offer does not represent a case where an enterprise merges with another enterprise,
where an enterprise is assigned by or leases from another enterprise the whole or the
substantial part of the business or assets of such other enterprise, or where an enterprise
operates jointly with another enterprise on a regular basis or is entrusted by another
enterprise to operate the latter's business, as respectively provided under Items (1),
(3) and (4) of Article 10(I) of the FTA.
|
|
|
6.
|
Given
the above, this Tender Offer does not constitute any type of combination as provided
in Article 10(I) of the FTA, and thus is not subject to merger control filing with FTC.
|
|
|
V.
|
This
opinion is prepared for AUO for this Tender Offer and has no effect on any other third
party or other purpose beyond the applicable regulations specified herein. In addition,
this opinion is issued for the benefits of AUO. Except for filing to the competent authorities
and making public announcement, without our prior written consent, no person may refer
to this legal opinion or cite any or all of the contents herein by any means.
|
Lee and
Li, Attorneys-at-Law
Bo-Sen Von
Annex
4 _ An Evidentiary Document under Article 9(III) of the Regulations Governing Public Tender Offer for Securities of Public
Companies
(Translation,
for reference only)
Confirmation
of the Bidder’s Ability to
Pay the
Tender Offer Consideration
The
bidder, AU Optronics Corp. (“Bidder”) plans to acquire 65,249,177 shares of the outstanding common shares of
ADLINK Technology Inc. (“Target Company”) by means of tender offer (this "Tender Offer"),
wherein a total cash consideration of NT$3,719,203,089 shall be paid.
On
February 6, 2020, the Bidder has remitted all consideration of this Tender Offer, NT$3,719,203,089, to the bank account opened
by the tender offer agent for this Tender Offer (Bank account name: KGI Securities Co., Ltd. Tender Offer bank account (KGI Bank,
Zhongshan Branch); Account number: 00001118616000).
According
to the evidence obtained and the procedure implemented in accordance with Item 2 of Article 9(IV) and Article 9(V) of the Regulations
Governing Public Tender Offers for Securities of Public Companies and the Self-regulatory Codes for Accountant to Issue the Confirmation
of the Bidder's Ability to Perform the Payment of the Consideration of the Tender Offer, I, as an accountant, have reasonably
confirmed that the Bidder has the ability to pay the cash consideration for this Tender Offer on the date of the issuing of this
confirmation.
|
|
WeTec
International CPAs
Accountant:
Ming-Yang, Lai
February
6, 2020
|
Annex
4 _ An Evidentiary Document under Article 9(III) of the Regulations Governing Public Tender Offer for Securities of Public
Companies
(Translation,
for reference only)
Statement
According
to Item 2 of Article 9(IV) of the Regulations Governing Public Tender Offers for Securities of Public Companies (the "Regulations"),
if the tender offer consideration is to be paid in cash, a written confirmation of the bidder’s financial ability to perform
payment of the tender offer consideration shall be issued by a financial adviser with the qualification of a securities underwriter
or by a CPA that conducts the business of auditing and attesting the financial reports of public companies, after such CPA or
adviser has gained a full understanding of the bidder and taken reasonable steps to evaluate the bidder’s sources of funds.
We, WeTec
International CPAs, hereby confirm and declare that, Mr. Ming-Yang, Lai is eligible to conducts the business of auditing and attesting
the financial reports of public companies, which has been filed for record with the Financial Supervisory Commission (the filing
letter Jin-Guan-Jeng-Shen-Tzu No. 0990037537 has been issued). As of the date of the issuance of this statement, Mr. Ming-Yang,
Lai is eligible to conduct the business of auditing and attesting the financial reports of public companies, and therefore, in
accordance with Item 2 of Article 9(IV) of the Regulations, is qualified to issue the written confirmation that the bidder, AU
Optronics Corp., has the ability to perform payment of the consideration of the tender offer.
This statement
shall be governed by and construed in accordance with the laws of the Republic of China. Any dispute arising out of or relating
to this statement shall be submitted to Hsinchu District Court as the court of first instance.
WeTec
International CPAs
February
6, 2020
Annex
5 _ Letter of Commitment for Payment
(Translation,
for reference only)
Letter
of Commitment
We,
AU Optronics Corp. (the "Company"), according to Article 43-1(II) of the Securities and Exchange Act, plan to acquire
65,249,177 shares issued by ADLINK Technology, Inc. (ticker: 6166) by means of tender offer at the price of NT$57 per share. The
amount required for the cash consideration of this tender offer is estimated to be NT$3,719,203,089. We, according to Article
7(II) of the Regulations Governing Information to be Published in Public Tender Offer Prospectus, hereby undertake that the Company
shall and will bear the obligation to pay the consideration of this tender offer.
Financial
Supervisory Commission
|
|
Undersigned:
AU Optronics Corp.
Representative:
Shuang-Lang, Peng
February
6, 2020
|
Annex
6 _ Shareholders’ Agreement
(Translation,
for reference only)
Shareholders’
Agreement
THIS SHAREHOLDERS’
AGREEMENT (this "Agreement") dated February 5, 2020 (the "Execution Date"), is entered into
by and between the following parties:
|
|
1.
|
AU Optronics
Corp., a corporation incorporated and existing under R.O.C. (Taiwan) law, with registered
address at No. 1, Li-Hsin Rd. 2, Hsinchu Science Park, Hsinchu City 30078, Taiwan ("Party
A"); and
|
|
|
2.
|
Jim
Liu, an R.O.C. (Taiwan) citizen, with the ID number of *** and resident address at
*** ("Party B").
|
(Hereafter
collectively referred to as the "Parties" and individually as each "Party")
WHEREAS,
by means of tender offer, Party A intends to acquire between 10,874,863 and 65,249,177 shares of common shares of ADLINK Technology,
Inc. (ticker: 6166, "ADLINK"), accounting for approximately 5% to 30% of the total outstanding shares of ADLINK
(the "Tender Offer");
WHEREAS,
as one of the major shareholders and the incumbent chairman of ADLINK, Party B agrees to support the Tender Offer; and
WHEREAS,
in view of the fact that Party A will become one of the shareholders of ADLINK after the completion of the Tender Offer, the Parties
contemplate to reach an agreement on their shareholders' right vested in the shares of ADLINK they hold.
NOW THEREFORE,
the Parties hereto agree as follows:
Article
1 Election of the Board of Directors
|
|
1.1
|
According
to the Articles of Incorporation of ADLINK in force on the Execution Date, the Board
of Directors (the "Board") shall consist of 5 to 9 directors, including
not less than 2 independent directors, and the seats of independent directors shall comprise
not less than one-fifth of the directors' seats. Party B hereby agrees that, after the
completion of the Tender Offer, in the event of by-election/re-election of the Board
in the annual shareholders' meeting of this year and re-election of the Board in the
shareholders' meeting in the following years, Party B shall support and cause the nominees
proposed or designated by Party A to be elected for at least 1 non-independent director
seat ("Party A's Director").
|
|
|
1.2
|
In the
event that the position of Party A's Director is vacant for any reason (including, but
not limited to, death, resignation or removal of the incumbent director), and where Party
A may not re-designate a new representative for the remaining office term of the predecessor
according to relevant laws, Party B hereby agrees that it shall support and cause the
nominees proposed or designated by Party A to be elected as director to fill such vacancy
in the shareholders' meeting held for the by-election of the new director.
|
|
|
1.3
|
To support
Party A's Director as stipulated in Articles 1.1 and 1.2 herein to be elected as directors,
Party B shall take all necessary actions as permitted by law, including, but not limited
to, after the completion of the Tender Offer, causing the Board of ADLINK to resolve
and propose the by-election/re-election of directors to the annual shareholders' meeting
held this year, voting for the nominees proposed or designated by Party A for the common
shares it holds, and/or causing its related party to vote for the same.
|
Annex
6 _ Shareholders’ Agreement
(Translation,
for reference only)
Article
2 Termination
|
|
2.1
|
This Agreement
shall take effect upon its execution and may be terminated in the following events:
|
|
|
(1)
|
Both
Parties agree to terminate this Agreement in writing;
|
|
|
(2)
|
In
the event that the Tender Offer cannot be completed within 6 months from the Execution
Date, this Agreement shall be terminated automatically;
|
|
|
(3)
|
In
the event that either Party ceases to be a shareholder of ADLINK for any reason, this
Agreement shall be automatically terminated;
|
|
|
(4)
|
In
the event that one Party violates this Agreement and such default is not or cannot be
cured after the defaulting party receives a written notice from the non-defaulting Party,
the non-defaulting party may terminate this Agreement in writing.
|
|
|
2.2
|
After
the termination of this Agreement, neither Party shall bear any obligation under this
Agreement, except the rights and/or obligations existing prior to the termination of
this Agreement, provided, however, that Article 3 herein shall survive the termination.
|
Article
3 Miscellaneous
|
|
3.1
|
The terms
and conditions of this Agreement, including the existence of this Agreement, and any
other information hereof shall be confidential information. For the confidential information
disclosed by the disclosing party, except under any of the following circumstances, the
receiving party shall not disclose such confidential information to any third party:
|
|
|
(1)
|
With
the consent of the disclosing party;
|
|
|
(2)
|
As
required by applicable law or competent authorities;
|
|
|
(3)
|
The
confidential information is or becomes part of the public domain or publicly available
or known through no breach by the receiving party; or
|
|
|
(4)
|
Disclosure
to each Party's professional consultants or each Party's employees who need to know the
confidential information in the course of their duties.
|
|
|
3.2
|
Without
the prior written consent from the other Party, neither Party may assign any rights or
obligations under this Agreement. This Agreement shall be binding upon the respective
successors and assigns of the Parties.
|
|
|
3.3
|
Except
as agreed upon in writing by the Parties, the provisions herein may not be amended or
modified, and neither Party may be exempted from the compliance with the provisions herein.
|
|
|
3.4
|
If any
provision in this Agreement is deemed unenforceable, such provision shall be excluded
from this Agreement. The Agreement shall be interpreted as such unenforceable provision
is excluded and the remaining provisions are still enforceable.
|
|
|
3.5
|
This Agreement
shall constitute the sole and entire agreement and understanding of the Parties, and
shall supersede all prior written or oral communications, covenants and agreement between
the Parties.
|
Annex
6 _ Shareholders’ Agreement
(Translation,
for reference only)
|
|
3.6
|
This Agreement
shall be governed by and construed in accordance with the laws of the Republic of China,
without regard to conflict of laws rules. Any dispute arising out of or relating to this
Agreement shall be submitted to Hsinchu District Court as the court of first instance.
|
|
|
3.7
|
Each Party
shall bear its own cost and expenses incurred in preparation, negotiation, execution
and enforcement of this Agreement.
|
|
|
3.8
|
This Agreement
shall be executed in duplicate, with each party holding one original.
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
Annex
6 _ Shareholders’ Agreement
(Translation,
for reference only)
IN WITNESS
WHEREOF, the Parties have entered into this Agreement as of the date first written above.
Party
A:
AU Optronics
Corp.
____________________
Name:
Title:
Party
B:
Jim Liu
____________________