Strategic buyer seen circling BenQ

Shares in BenQ, the troubled Taiwanese electronics company, jumped by almost 7 per cent on Thursday to T$13.95 in what some observers interpreted as a sign that a strategic buyer might be moving in.

The rise followed an equally big drop a day earlier that left BenQ’s share price at an historic low after the group’s offices were searched as part of an insider trading investigation.

Analysts said the company’s depressed share price could have presented an opportunity for rivals eyeing BenQ’s successful affiliate AU Optronics, one of the world’s largest flat-panel makers, to launch a hostile takeover.

BenQ, which has a diversified shareholding structure, is AUO’s largest shareholder.

Both companies were formerly part of the Acer Group.

“It would make sense for companies such as Hon Hai or Lite-On to buy BenQ at this point,” said Vincent Chen, an analyst with CLSA in Taipei.

Gaining control of the highly profitable AUO would be in line with the strategy of vertical integration being pursued by Hon Hai, the world’s largest electronics contract manufacturer, and an increasing number of its rivals, said Mr Chen.

Rumours about a possible hostile takeover of BenQ surfaced last year after the company’s acquisition of Siemens’ handset business turned sour.

Hon Hai and Quanta Computer have both repeatedly denied interest in BenQ. But traders said Thursday’s exceptionally high transaction volume pointed to such a strategic investor rather than a large number of small buyers.

More than 118m BenQ shares, about 4 per cent of its capital stock, changed hands, 10 times the average in trading over the past months.

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