NEW YORK (TheStreet) -- Shares of Silicon Precision Industries (SPIL) were gaining 23.9% to $6.42 on heavy trading volume Friday, after Advanced Semiconductor Engineering (ASX) announced it plans to commence a tender offering in China and the U.S. for shares of the Taiwanese semiconductor packaging and testing services company.
ASE said it will offer 45 New Taiwan dollars per common share of SPIL, and 225 New Taiwan dollars per American Depositary Share of the company.
ASE plans on acquiring about 779 million common shares of SPIL, or about 25% of the common shares of the company.
SPIL said in a statement that it was not aware of ASE's tender offer before the latter company made the announcement. SPIL will provide a formal response along with recommendation and explanations within seven days.
About 4.5 million shares of SPIL were traded by 2:01 p.m. Friday, above the company's average trading volume of about 1 million shares a day.
Separately, TheStreet Ratings team rates SILICONWARE PRECISION INDS as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate SILICONWARE PRECISION INDS (SPIL) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry average. The net income increased by 5.0% when compared to the same quarter one year prior, going from $114.31 million to $120.07 million.
- The current debt-to-equity ratio, 0.40, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.21, which illustrates the ability to avoid short-term cash problems.
- 42.45% is the gross profit margin for SILICONWARE PRECISION INDS which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 17.26% trails the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market on the basis of return on equity, SILICONWARE PRECISION INDS has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: SPIL Ratings Report