UPDATE 1-KKR, Taiwan's Yageo founder to buy Yageo in $1.6 bln deal

Tue Apr 5, 2011 11:56pm EDT

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HONG KONG/TAIPEI, April 6 (Reuters) - Private equity firm Kohlberg Kravis Roberts & Co LP and the founder of Taiwan's Yageo Corp plan to buy the components maker in a $1.6 billion deal, sending its shares up by the maximum allowed in a day.

KKR and Yageo founder and chairman, Pierre Chen, will form a company to bid for all the shares of Yageo, a maker of electronic components including resistors and capacitors, they said in a statement on Wednesday.

"From a long term perspective, the new shareholding structure will enable investments in accelerated high end product development and deeper penetration into western markets, which will complete our transformation into a global leader across our focus products," Chen said in the statement.

They are offering T$16.10 a share, a 14 percent premium to Yageo's closing share price on April 1. The price values Yageo at $1.6 billion.

Yageo's shares rose 6.74 percent on Wednesday, the maximum allowed in a day, to $15.05. Taiwan's stock market was closed on Monday and Tuesday for a public holiday.

KKR has been a partner with Yageo since 2007. Chen will remain head of the new company. The statement did not say if the company would be delisted from the Taiwan exchange.

The planned takeover comes as component makers in Taiwan could see business pick up after the earthquake in Japan disrupted supplies from Japanese makers.

"Yageo has been boosting its capacity in the last two years and has the capability to compete with Japanese makers," said Sean Ryan Hsiao, and analyst at Fubon Securities.

"After Japan's earthquake we are hearing that a lot of international tech firms will use Yageo."

UBS was financial adviser to the buyers. (Reporting by Stephen Aldred in Hong Kong and Argin Chang in Taipei; Editing by Jacqueline Wong)

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