Weltrend Semiconductor : Announcement of the resolution of the Board of Directors of the Ccompany to acquire the ordinary shares of Sentelic Corporation through a public tender offer

Close

Today's Information

Provided by: Weltrend Semiconductor, Inc.
SEQ_NO	2	Date of announcement	2022/07/27	Time of announcement	20:14:43
Subject	Announcement of the resolution of the Board of Directors of the Ccompany to acquire the ordinary shares of Sentelic Corporation through a public tender offer
Date of events	2022/07/27	To which item it meets	paragraph 11
Statement	1.Type of merger and acquisition (e.g.merger, spin-off, acquisition, or share transfer):Public Tender Offer ("Tender Offer") 2.Date of occurrence of the event:2022/07/27 3.Names of companies participating in the merger and acquisition (e.g., name of the other company participating in the merger, newly established company in a spin-off, acquired company, or company whose shares are transferred): Sentelic Corporation ("Target") 4.Trading counterparty (e.g., name of the other company participating in the merger, company spinning off, or trading counterparty to the acquisition or share transfer): Shareholders of the Target who tender shares. 5.Whether the counterparty of the current transaction is a related party: No 6.Relationship between the trading counterparty and the Company (investee company in which the Company has re-invested and has shareholding of XX%), explanation of the reasons for the decision to acquire from or transfer shares to an affiliated enterprise or related party, and whether it will affect shareholders' equity: If a related party of the Company participates in the Tender Offer, the Ccompany must not refuse or exclude it according to law. Therefore, the counterparty of the Tender Offer may be a related party. Notwithstanding the forgoing, the tender offer price and conditions are consistent among all the tender offerees, thus does not affect shareholders' interests. 7.Purpose of the merger and acquisition: Both the tender offeror and the Target are mainly focus on IC design. The Target's main product line is motor control IC for cooling fans, and the tender offeror has also been actively developing this product line for many years. The tender offeror believes that after the completion of this tender offer, both companies will bring complementary benefits, enhance the competitiveness of both companies and create synergy. 8.Anticipated benefits of the merger and acquisition: The tender offeror hopes that after the completion of this Tender Offer, both companies will integrate the R&D capabilities, professional technologies, sales channels and other resources, and enhance the cost effectiveness of manufacturing, packaging and testing to create synergy. 9.Effect of the merger and acquisition on net worth per share and earnings per share: If synergy can be created after the completion of the Tender Offer, it should have positive benefits for the Company's future book value and earnings per share. 10.Follow-up procedures for mergers and acquisitions, including the time and method of payment of the consideration for mergers and acquisitions, etc.: Time: When all conditions of the Tender Offer are fulfilled and the tender offeror or the financial institution who issuing the performance guarantee has completed the remittance on time, Taishin Securities ("Tender Offer Agent") will perform payment of the consideration of the Tender Offer within 5 business days (inclusive) after the expiration day of the tender offer period (or the extended tender offer period, as the case may be). Method: Taishin Securities, the Tender Offer Agent, will pay the consideration by transfer to the bank account of the offeree in the Tender Offer ("Offeree") provided by the TDCC. If there is an error with information of bank account of the Offeree or the remittance cannot be completed due to other reasons, Taishin Securities will mail a check (Payee Names Underlined and Endorsement Transfers Prohibited) to the TDCC or the Offeree's address on the next business day after the confirmation that the remittance cannot be made. The remittance amount/check amount is calculated based on the consideration to the effective tendered shares minus the applicable securities transaction tax, remittance fee/postage, TDCC/dealer's handling fee and other related expenses and shall be rounded down to the nearest dollar (Remainders less than one dollar will be discarded). 11.Types of consideration for mergers and acquisitions and sources of funds: The total amount of consideration to be paid for the Tender Offer is NT$1,117,119,600, of which NT$700,000,000 is paid by the tender offeror with its own funds, and the remaining NT$417,119,600 is financed by the tender offeror from financial institution. 12.Share exchange ratio and calculation assumptions: (1) Exchange Ratio: Not applicable. (2) Calculation Basis: Not applicable. 13.Whether the CPA, lawyer or securities underwriter issued an unreasonable opinion regarding the transaction: Not Applicable. 14.Name of accounting, law or securities firm:Crowe (TW) CPAs 15.Name of CPA or lawyer:Wu, meng-da 16.Practice certificate number of the CPA: Reference No. Tai-Cai-Zheng-Deng-Liu-Zi 3622 17.The content of the independent expert opinion on the reasonableness of the share exchange ratio, cash or other assets allotted to shareholders in this merger and acquisition: After review of the income approach and Methods of Market Prices, Method of Comparing Listed Companies and OTC Companies and the Method of Comparable Transactions in market approach of an appraiser's appraisal report by an independent expert, the fair value of the Target on the reference date is between NT$ 66.5 and 78. The tender offer consideration for the Tender Offer is NT$ 72.9, which is in the reasonable price range mentioned above, therefore, it should be reasonable. The suggest value range provided by the expert engaged by the tender offeror: The valuation result is concluded based on the market approach and the income approach: Market approach: The suggested value of the Target's 100% equity value on a controlling, marketable basis ranged from TWD1,957 million to TWD2,344 million, Income approach: The suggested value of the Target's 100% equity value on a controlling, marketable basis ranged from TWD1,997 million to TWD2,354 million, The income approach reflects the Target's and the Company's management view of the future operation of the Target; the market approach reflects the recent market value of the Target. The valuation result is concluded based on the overlapping value range of the two valuation methods. The suggested value of the Target's 100% equity value on a controlling,marketable basis ranged from TWD1,997 million to TWD2,344 million, equivalents to TWD66.5 to TWD78.0 per share. 18.Estimated date of completion: Pursuant to the applicable law, the Tender Offer must be declared to the Financial Supervisory Commission and published. The declaration should be no later than July 28, 2022, and the date of the Tender Offer should be no later than July 29, 2022. Upon the completion of the condition precedent of the Tender Offer and the tender offeror or the financial institution that provided the performance guarantee document has complete the money transfer as scheduled, then the consideration for the Tender Offer shall be paid by Taishin Securities, within 5 business days (inclusive of the 5th business day) of the expiry of the tender offer period (if extended then the expiry of the extended period). 19.Matters related to the assumption of corporate rights and obligations of the dissolving company (or spin-off) by the existing or newly-established company:Not applicable. 20.Basic information of companies participating in the merger: Not Applicable. 21.Matters related to the spin-off (including estimated value of the business and assets planned to be transferred to the existing company or new company.The total number of shares to be acquired by the spun-off company or its shareholders, and their respective types and no.Matters related to the reduction, if any, in capital of the spun-off company)(note: not applicable for announcements unrelated to spin-offs):Not Applicable. 22.Conditions and restrictions for future transfer of shares resulting from the merger and acquisition:No 23.The plan after the merger and acquisition is completed: Please refer to the tender offer prospectus. 24.Other important terms and conditions:No 25.Other major matters related to the mergers and acquisitions: (1)Tender Offer Period： Begin on July 29, 2022 ("Commencement Date of Tender Offer Period") and end on August 17, 2022 ("Expiration Date of the Tender Offer Period"). Time to accept tender is every business day from 9:00AM to 3:30PM (Taiwan time) during the tender offer period. The Company may report to the Financial Supervisory Commission in accordance with applicable laws and make a public announcement of an extension of the tender offer period for a period not exceeding 50 days. Please refer to the tender offer prospectus for the time and method of accepting tender for each business day. (2) Maximum and minimum number of shares to be acquired: The tender offeror intends to acquire 15,324,000 shares ("Max Quantity of Shares"), representing around 51.00% of the total issued shares of 30,047,000 shares of the Target's total issued ordinary shares as recorded by the Department of Commerce, MOEA on June 10, 2022. However, if the number of effective tendered shares does not reach the Max Quantity of Shares but reaches the minimum acceptance threshold of 13,522,000 shares ("Minimum Quantity of Shares"), representing around 45.00% of the total issued shares of the Target, the conditions of the Tender Offer will be deemed fulfilled. 26.Any objections from directors to the transaction:No 27.Information on interested directors involved in the mergers and acquisitions:No 28.Whether the transaction involved in change of business model:No 29.Details on change of business model:Not Applicable 30.Details on transactions with the counterparty for the past year and the expected coming year: the past one year: No the next year: After the expiry of the tender offer period, the tender offeror will make a separate assessment based on the actual number of shares to be acquired and other circumstances, but there is no specific plan yet. 31.Source of funds: Self-owned fund and financing from financial institutions. 32.Any other matters that need to be specified: (1) In order to proceed with the Tender Offer, it is proposed that the board of directors authorize the chairman to handle all necessary procedures in relation to the Tender Offer and to take necessary actions in representation of the Company, including, but not limited to, completing, and signing tender offer prospectus, negotiating, signing, and delivering all relevant documents and agreements, and filing request or reporting to competent authorities, etc. If the tender offer procedure or conditions need amendment due to the instruction of competent authorities, in response to market conditions, or in case of insufficient time to obtain the approval, permission or effective filing from the competent authorities, or any other justifiable reasons; it is proposed to authorize the Chairman to handle all relevant matters with full authority. (2) Pursuant to the applicable law, the Tender Offer must be declared to the Financial Supervisory Commission and published. The declaration should be no later than July 28, 2022, and the date of the Tender Offer should be no later than July 29, 2022. (3) Please refer to the tender offer prospectus for other tender offer conditions. Note 1. The tender offer prospectus shall be found on the websites below: Market Observation Post System: http://mops.twse.com.tw Note 2. Matters related to existing or newly established companies undertake the rights and obligations of the dissolved Ccompany, including the handling principles for treasury shares and other equity-type securities. Note 3: The basic information of the companies involved in the merger includes the Ccompany name and the main contents of the business. Note 4: If there is a change in the business model, please specify in the column that it includes business scope change, product line expansion/reduction, process adjustment, industry horizontal/vertical integration, or other matters involving the adjustment of the operating structure. Note 5: If it is not a private equity fund used for a merger and acquisition case, it must be filled in. Not applicable. Note 6: If the case still needs to be approved or licensed by domestic and foreign competent authorities (such as the Investment Commission, Fair Trade Commission, Anti-Monopoly Bureau, or other units), the relevant matters should be stated.