KKR and founder to buy out Yageo for $1.6bn

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Private equity giant KKR and TM Chen, the founder and chairman of Taiwanese electronics business Yageo, are set to buy out 100 per cent of the company’s equity for TWD$47bn ($1.6bn).

The offer price of TWD$16.10 ($0.56) per share represents a 14 per cent premium over Friday’s closing price of TWD14.10 ($0.49) for the Taiwan-listed stock. It jumped to TWD15.05 ($0.52), the maximum rise allowed in one day, when the exchange re-opened today. Its share price last hit TWD16 in 2004.

Founded by Chen in 1977, Yageo produces electronic components like resistors, capacitors, ferrites and inductors. It employs over 10,000 people.

KKR bought $250m of the company’s convertible bonds in 2007, giving it an effective 20 per cent stake, and has worked closely with the management since.

Chen and KKR between them currently own 34.3 per cent of the company. If the deal succeeds in winning shareholder and regulatory approval, Chen will hold a 55 per cent stake, with KKR owning the remaining 45 per cent.

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