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TPK shares down as firm denies Hon Hai rumors(China Post (Taiwan) Via Acquire Media NewsEdge) y Ted Chen TAIPEI: TPK shares yesterday tumbled by 7 percent following the company's denial of market rumors that Hon Hai Precision Industry Co. may be planning to acquire a stake in the touch display panel maker. TPK shares yesterday dived by NT$11, or 7 percent, the maximum intraday movement allowed on the Taiwan Stock Exchange to close at NT$157, with turnover reaching 16,802,000 shares over the session. Shortly after the opening bell yesterday the company issued an announcement verifying that market rumors and media coverage on Hon Hai's intent to acquire a stake in TPK are false, and that there will be no major changes to the firm's management team. The company urged the investing public to exercise caution and avoid being misled by rumors and false reports. Following the announcement, TPK shares reached an intraday high of NT$169.5 at around 9:30 a.m., rallying above the previous session's closing price of NT$168, but began losing ground to close 7 percent lower. Market rumors had previously suggested that Hon Hai may be seeking to capitalize on TPK's recent slumping share price performance, and acquire a considerable stake in the company at NT$130. Rumors also suggested that through the stake acquisition Hon Hai intends to appoint a number of executives from the conglomerate's touch display panel arms in establishing a presence in TPK's highlevel management team. Institutional investors earlier hinted that Hon Hai may be seeking an opportunity to expand its hold on the touch display panel sector through the stake acquisition by absorbing the firm's existing clientele and production capacity. TPK today will stage the company's earnings conference and further clarify ongoing rumors. However, the company yesterday acknowledged that it is undergoing an organizational restructuring. Gloomy Prospects across Entire Touch Display Panel Sector Meanwhile, prospects have been gloomy for the touch display panel sector on both sides of the strait. Reports indicate that more than 100 small and mediumscaled touch panel makers have folded in China, while Taiwanese bellwethers including TPK, Wintek (å‹Âè¯), and Young Fast Optoelectronics Co. (æ´‹è¯) have been facing facility closures and downsizing. Amid challenging market conditions, only TPK and GIS (æ¥ÂæˆÂ), the touch display panel arm of Hon Hai have been able to retain their status as largescale touch display suppliers, according to reports. Industry experts noted that although consolidation in the increasingly crowded touch display panel sector may aid in curbing ongoing cutthroat price competition and oversupply, a union between TPK and another company may not bring increased chances of securing more orders from Apple, as the U.S.based giant tends to favor collaborating with two to three suppliers instead of relying heavily on a single source. |