Cirtek pegs follow-on offer price at P20

MANILA, Philippines - Cirtek Holdings Philippines Corp., a publicly listed semiconductor and wireless broadband manufacturing company, has pegged its final offer price for its P2.88 billion follow-on offering at P20 per share, below the earlier announced maximum price of P24 per share.

“In relation to the follow-on offering listing application of Cirtek Holdings Philippines Corp., we would like to inform you that the final offer price of the FOO is at P20 per share,” said Anthony Buyawe, chief financial officer, in a disclosure to the local bourse yesterday.

Analysts, however, said that while the final price is below the maximum price of P24 per share, it is still a bit too high at P20.

“It’s still high,” one analyst noted.

Another analyst said the price should have been below P20 per share.

Cirtek adjusted its timetable for the offering to Oct. 28 to Nov. 4 for the offer period from the original timetable of October 23 to 30. It also adjusted the listing date to November 10 from Nov.  5 previously.

“The additional three days is needed by the company to close critical deals in the US so they can make the appropriate disclosure,” a source familiar with the matter said.

In an earlier briefing, Cirtek officials said bulk of the proceeds of its upcoming offering would be used to fund acquisitions.

“We have several acquisition targets in the pipeline that is why we are back in the market,” Buyawe said.

Cirtek chairman Jerry Liu said the company is interested in overseas acquisitions and those that are in “advanced technology.”

“Our acquisition will focus on wireless broadband industry,” he said.

Buyawe said that in the Philippines, the company is aiming to double the capacity of its Laguna manufacturing plant to two billion chips a year.

Cirtek is also optimistic on the success of its new technology dubbed as TV White Space also called Super Wi-fi allows the use of banks that are currently unlicensed.

“There has been a tremendous growth in the number of connections to the Internet in the past decade. With connectivity now a basic need, this trend is expected to continue. But despite this growth, a large percentage is still unserved particularly in developing countries and certain regions in developed countries.

Furthermore, with the demand increasing everyday, the networks are becoming congested in urban areas,” said Cirtek ATS chief executive officer Alvin Guzon.

Of the net proceeds of P1.854 billion, Cirtek would use P630.7 million to fund strategic acquisitions, P631.9 million for capital expenditures, P314.1 million for working capital requirements and P278.2 million for payment of financial obligations.

The offering will consist of up to 80 million primary common shares with an oversubscription option of up to 40 million secondary common shares at a maximum offer price of P24 per share. Cirtek will use the net proceeds from the primary share sale of up to P1.92 billion to finance its long-term expansion and for strategic acquisitions.

First Metro Investment Corp. is issue manager and book runner while SB Capital Investment Corp. together with First Metro is joint lead underwriter.

Since its initial public offering in 2011, Citek has been operating as a provider of semi-conductor outsources assembly and testing (OSAT) services to customers, who in turn provide these semiconductor packages to end applications.