Carlyle Is in Talks With ASE
To Buy Out Taiwan Company 

HENNY SENDER / Wall Street Journal 24nov2006

More on Carlyle -  Here's a page on Mindfully.org that runs a 54 minute Real Video film about the The Carlyle Group. Or simply listen to the sound track of that same video as an MP3 file.

Note: The first couple minutes of the video is in Dutch. The rest is in English. 

Intro English translation: "The war in Iraq is over. 
The rubble is still smoking While the first dozers are already entering the country. After the coalition forces destroyed Baghdad it is now primarily American companies who are to rebuild Iraq. An interesting point is that these companies usually have people on the payroll who have been politicians. Is this a conflict of interests or a new (global) way of doing business? One of the corporations that work this way is the Carlyle Group. On their payroll are people like : George Bush (Sr.), James Baker III and old premier John Major. The Carlyle Group is a private investment bank which doesn't come to the publics attention very often but it is one of the biggest American (ed: USA) investors of the defense industry, telecom, property and financial services. What is the Carlyle Group? Who are the people behind the name? And how much power does Carlyle have?"

 

The Carlyle Group is in talks with the management of Advanced Semiconductor Engineering Inc. of Taiwan to make a tender offer for the publicly listed company in what would be a buyout valued at between $5 billion and $6 billion.

A deal of that magnitude would mean that Asia is joining the same sort of private-equity frenzy that has rocked the U.S. and Europe.

ASE, a chip-testing and packaging company, is listed both in Taiwan and on the New York Stock Exchange.

"A Carlyle-led consortium acknowledges that it has submitted an indication of interest to the Board of Directors regarding a potential acquisition," Carlyle said in a release.

The Carlyle announcement added that the investment firm had signed an exclusive agreement with Jason Chang, the chairman of ASE and its largest shareholder, with 18.4% of the outstanding shares, to buy out other shareholders at a price of 39 New Taiwan dollars a share. That represents a 23.5% premium over the 30-day average closing price of the stock.

Still, the ultimate success of the deal depends on the willingness of shareholders to tender their shares. That sort of public-to-private offer with the support of management has been a feature of recent deals in the U.S. including Kinder Morgan Inc. and HCA Inc.

Semiconductor companies have been a recent focus of private-equity firms. Carlyle was recently part of a consortium led by The Blackstone Group, along with Texas Pacific Group and Permira Funds, that bought Freescale Semiconductor in a $17.6 billion deal. In the past, private-equity firms were reluctant to buy semiconductor operations but recently their appetite for the sector has grown, with the conclusion that these companies are less volatile than in the past, making it possible to support heavy debt loads.

In recent months, Taiwan, along with Australia, has been among the most promising markets for international private-equity firms. Carlyle has been particularly active in the media sector in Taiwan, having recently bought Taiwan Broadband Communications and Eastern Multimedia Corp. Its presence in Taiwan means that it has extensive banking relationships with local banks, which are expected to provide attractive terms on the debt for the potential buyout.

Carlyle's interest in the Taiwan technology sector has been moving the market the past few days. Other rumored targets of possible interest included Acer Inc., Quanta Computer Inc. and Lite-On Technology Corp. Carlyle had worked quietly on the deal, lest competitors jump in. In its most recent quarter, ASE's net was just over $125 million. But the company warned that its outlook wasn't robust, saying that weak demand amid an inventory correction would hurt margins.

—Yun-Hee Kim contributed to this article.

Who's Who in Private Equity

Wall Street Journal 24nov2006 

Private-equity firms are on a record-setting global buying binge, expected to raise some $400 billion this year, and their deals are taking on more heft. Take a look at the major players.

Carlyle Group
Assets Under Management: $44.3 billion
Headquarters: Washington, D.C.
Founded: 1987
Chairman: Louis V. Gerstner

Carlyle is the largest private-equity firm, with many connections across business and politics, such as IBM ex-chief Louis Gerstner and former President George H.W. Bush. The firm became Wall Street's first "$10 billion man," after raising $7.85 billion for U.S. investments and $2.2 billion for European purchases last March. Carlyle has also raised about $4.8 billion to target deals in Asia. The firm is now targeting a single fund of $15 billion, but may opt for a larger size. In December, Carlyle partnered with others to pay $15 billion for Ford Motor's Hertz, which recently went public. The firm also was a key component in the acquisition of Dunkin' Brands for $2.43 billion. This year, Carlyle was part of one of the largest private-equity deals ever — a $14.61 billion acquisition of oil-pipeline operator Kinder Morgan — as well as one that snagged Dutch market research firm VNU for $9.84 billion. More recently, it was part of a group that bought Freescale Semiconductor for $17.6 billion.

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