Taiwan's Lite-On Technology Corp will offer 277 million euros ($380 million) for Finnish handset casing maker Perlos, aiming to strengthen its foothold in the cellphone industry. The deal, announced on Monday, gives the Taiwanese computer peripherals maker access to the world's top cellphone maker Nokia, Perlos' largest client.
Lite-On expects the acquisition to boost its sales by about 20 percent next year. "Currently, mobile phones only account for 5 percent of revenue, so we see growth in this sector to be very strong for us," Andrew Lin, Lite-On's chief financial officer, told reporters.
The handset industry is the world's largest consumer electronics business, with more than 1 billion phones sold each year. Lite-On said it has 700 million euros in cash and was looking for further expansion in the handset sector.
"The aim for Lite-On is to increase portfolio in components before we get into final assembly," Warren Chen, head of Lite-On's investing arm told a news conference in Helsinki.
Lite-On will offer 5.20 euros cash per share for all shares in Perlos, a 40 premium over the closing price on Friday. Perlos' shares, which would be delisted from the Helsinki exchange, rose 36 percent to 5.04 euros by 1224 GMT.
"I have told my clients to accept the deal. It's a good premium for such an offer and I believe Nokia has already approved it," said eQ Bank analyst Jari Honko.
Perlos Chief Executive Matti Virtanen said the company's clients have a positive view on the deal. Perlos said its largest shareholder GWS, which owns 29.1 percent of shares, has approved the deal. The offer is conditional on a 90 percent acceptance rate.
Perlos holds a 16 percent share of the global market for mobile handset casing, the companies said. Its main rivals include Foxconn International Holdings, Germany's Balda and privately held US firm Nypro.
Perlos has laid off 4,000 staff this year, about 15 percent of its workforce, cutting annual costs by about 100 million euros as it has struggled to compete with rivals based in lower-cost countries.
It reported a net loss for 2006 and is expected to remain loss-making this year, but to turn a net profit of 22 million euros in 2008 on sales of 517 million euros, according to Reuters Estimates. Shares in smaller rival Nolato rose 5.5 percent in Stockholm on the deal, while Balda stock was up 4.8 percent in Frankfurt. The announcement came after Taiwan's stock markets closed. Lite-On's shares rose 4.35 percent, outperforming a 0.09 percent gain in the main TAIEX index.
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