Quanta CEO quits over strategy, shares jump

By Sheena Lee and Argin Chang

TAIPEI (Reuters) - Taiwan's Quanta Computer (2382.TW), the world's top contract notebook PC maker, said its chief executive quit on Friday, reportedly following a strategy row, sparking a rally in its stock on merger speculation.

Michael Wang's resignation had been rumored for the past few months following an extended period of leave. The company announced that acting CEO and co-founder C.C. Leung had taken over with immediate effect.

Wang, who has been with Quanta for about 19 years, has helped win orders from major clients including top brands such as Apple Inc (AAPL.O), Hewlett-Packard Co (HPQ.N), Dell Inc (DELL.O) and Sony Corp (6758.T).

In a letter to employees, Wang said he resigned after failing to reach consensus on the company's development and strategy, the Central News Agency said.

"This is not an optimum situation, since Wang was strong on the sales side, and if Wang is not around, this could create a missing piece for the company," said JP Morgan analyst Alvin Kwock.

"However, Leung is strong on the operations side and this change could help Quanta's notebook business, but not its non-notebook divisions, which the company has been aggressively developing," said Kwock, who currently rates Quanta "neutral".

Quanta shares closed up 4.3 percent at T$55.30, beating a 0.5 percent dip on the TAIEX index .

Analysts said the rise in the stock was a result of market rumors that Quanta could merge with Taiwan's top electronics maker, Hon Hai Precision Industry Co (2317.TW), and that the possibility of such a deal could increase with Wang's departure.

Hon Hai has denied the prospect of a merger with Quanta several times.

Quanta told Reuters in June it expects to ship up to 30 million notebooks this year, up from 20 million last year.

Quanta and its smaller cross-town rival Compal Electronics Inc (2324.TW) make up more than 40 percent of the world's notebook computers.