Royal Philips Electronics is planning to sell a portion of its 4.4 billion Taiwan Semiconductor Manufacturing Co. shares.
TSMC's board of directors today approved sponsoring an offering of the company's American Depositary Shares by its largest shareholder, Philips; the Development Fund of the Executive Yuan (DF), the company's second largest shareholder; and certain other, unnamed shareholders.
The maximum total offering size will be 210 million ADSs, with each ADS representing five TSMC common shares for a total of 1.05 billion shares. Exact amounts to be sold were not released, with the foundry kingpin stating the amounts will be disclosed at the time of the filings to the Taiwan Securities and Futures Bureau and the U.S. Securities and Exchange Commission (SEC).
Both Philips and DF have agreed not to sell any more TSMC shares at least until the end of 2006, either in the Taiwan or international markets, according to a statement made with the SEC today.
The planned offering will take place only in a "gradual and orderly fashion," TSMC added, and is expected to be completed by year's end.
"TSMC's management, acting as the gate-keeper, closely coordinates with such shareholders under the guidelines that interests of all TSMC shareholders are being protected, and that the market appetite based on professional opinions is sufficient to support such a sell-down," said Lora Ho, TSMC VP and CFO, said in the statement. "TSMC carefully reviews such proposals in terms of the quantity and timing to minimize the possible impact to the market."
Philips intends to remain as TSMC's strategic partner and its largest shareholder, TSMC added. Currently, Philips holds approximately 19 percent of TSMC shares; DF holds 7.4 percent of TSMC shares.
TSMC also today announced Morris Chang, company founder and current CEO, will step down as of July 1. Chang, who will remain chairman, proposed the appointment of COO Rick Tsai as the foundry's new CEO and president, and Deputy CEO F.C. Tseng as vice chairman, both gaining board approval.
