Exhibit 99.10
Discussion Materials
September 30, 2015
Project Island
I.Proposal Overview
II.Implied Valuation Analysis
III.Pro Forma Shareholder Analysis
IV.ADS Considerations
V.Valuation Considerations
VI.Proposal Considerations
VII.Next Steps
Appendix
Proposal Overview
Overview of Tahiti’s “17 September Proposal” to Barbados
The “Restructuring”:
Merging Barbados into Tahiti with Tahiti as the surviving company
Purpose: Eliminate the market trading value discount to the underlying net asset value of Barbados
Barbados shareholders receive from Tahiti:
ADSs representing their proportional interest in ownership of Tahiti (522.1mm shares)
Proportional interest in net cash of Barbados, $60.4mm USD as of June 30
Approximately $2.12 USD per Barbados share (subject to various adjustments)
Key Assumptions:
28,502,859 Barbados shares outstanding
522,080,358 Tahiti shares held by Barbados
Exchange ratio of 18.317 of Tahiti shares into each Barbados share in the form of ADSs
Other Provisions:
Expense of establishing and maintaining ADSs borne by Tahiti
Barbados cash consideration subject to adjustments for Barbados taxes, foreign exchange adjustment and settling of stock appreciation right and options
Barbados requires no more diligence than bank account balance, stock depositary information and license/joint agreements
Proposed Transaction Structure
Tahiti and Barbados merge in a cash and stock merger
Tahititransaction
Barbados shareholders receive ADSs of Tahiti shares
through the filing of a U.S. registration statement – plus net
of cash of Barbados
Consideration per Barbados share:
ADSs representing 18.317 Tahiti shares, plus
Tahiti $2.12 USD in cash (subject to adjustments)
Proposed Transaction Analysis($ in millions USD, except per share data) Based on 17th September Assumptions / Definitions Tahiti Offer % Stock / % Cash 90.9% / 9.1% Consideration to Barbados Current Tahiti Shares Outstanding 900.552 Tahiti Shares Owned by Barbados 522.080 Barbados Ownership of Tahiti 58.0% ADSs Issued to Barbados 522.080 Barbados Shares Outstanding 28.503 Implied Exchange Ratio 18.317x ADSs Issued to Barbados / Barbados Shares Outstanding Pro Forma Tahiti Shares 900.552 Tahiti Shares Outstanding - Tahiti Shares Owned by Barbados + ADSs Issued to Barbados Tahiti Share Price (in USD)1 $0.98 Equity Consideration $509.6 ADSs Issued to Barbados * Tahiti Share Price (in USD) Tahiti Equity Value per Share of Barbados $17.88 Equity Consideration / Barbados Shares Outstanding Initial Barbados Cash $60.4 Less Cash Settled SARs/Options 9.2 Number of Options * (Offer Price - Average Exercise Price) Plus Additional Cash Consideration 0.0 Net Cash to Barbados Shareholders $51.2 Cash Consideration per Share of Barbados $1.79 Net Cash to Barbados Shareholders / Barbados Shares Outstanding Total Consideration $560.8 Sum of Equity Consideration and Cash Consideration Total Consideration per Share of Barbados $19.67 Premium to Current Barbados Stock Value ($16.94) 16.1% Premium to Current Barbados Fundamental Value per Share ($19.67) 0.0% Pro Forma Tahiti Equity Value1 $879.1 Cash 416.4 Debt 274.5 Implied Enterprise Value $737.2 Pro Forma Barbados Equity Ownership 58.0% 2016E EPS Accretion / (Dilution) 0.0% Source: Capital IQ, Company filings and Wall Street research; Market data as of 9/25/15 (1) Based on exchange rate of 33.038 TWD per USD Project Island
Implied Valuation Analysis
Implied Valuation Analysis($ in millions, except per share) Barbados Tahiti Tahiti Market Capitalization $879.1 Tahiti Share Price as of (9/25/15) (TWD) $32.25Tahiti Shares Held by Barbados 522.080 Assumed Exchange Rate (TWD/USD) 33.04% Implied Economic Ownership (Basic) 58.0% Tahiti Share Price as of (9/25/15) (USD) $0.98Implied Value of Barbados Ownership $509.6 Tahiti Basic Shares Outstanding 900.552 Plus: Net Barbados Cash 60.4 Tahiti Market Capitalization (USD) $879.1 Less: Net Barbados Debt 0.0 Less: Cash1 417.1 Implied Equity Value of Barbados $570.0 Plus: Debt1 274.5 Barbados Fully Diluted Shares Outstanding 28.972 Tahiti Enterprise Value (USD) $736.5Implied Barbados Value per Share $19.67 Barbados Share Price as of (9/25/15) $16.94 Implied HoldCo Discount (13.9%)Implied HoldCo Discount 2Implied Discount 6 Month Avg. Discount 0% (10%) (15.1%) (20%) (30%)Source: Company presentations, Wall Street research, Bloomberg and Capital IQNote: Market data as of 9/25/15; (1) Based on exchange rate of 33.038 TWD per USD; (2) Based on shares outstanding at respective points in timeProject Island
Stock Performance OverviewBarbados Stock Performance Tahiti Stock Performance$32.00 800k $28.00 700k $24.00 600k $20.00 500k $16.00 400k $12.00 300k $8.00 200k $4.00 100k $0.00 0k Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 V olume Barbados$1.80 18M $1.60 16M $1.40 14M $1.20 12M $1.00 10M $0.80 8M $0.60 6M $0.40 4M $0.20 2M$0.00 0M Sep-14 Nov-14Jan-15 Mar-15 May-15Jul-15Sep-15V olume T ahitiBarbados Relative Performance Tahiti Relative Performance30% 45% 15% 30%3.3% 15% 0%(9.5% ) 0 3.3%(15%) (13.3% ) (9.5% )(13.3% ) (15%) (18.3% )(30%) (30.4% ) (30%)(45%) (45%) Aug-14Oct-14Jan-15Mar-15 May-15 Jul-15 Sep-15 Aug-14Oct-14Jan-15Mar-15 May-15 Jul-15Sep-15 Barbados T aiwan T A I E X T ahiti T aiwan T A I E X N A SDA Q C ompos ite I ndex T aiwan O SA T I ndex N A SDA Q C ompos ite I ndex T aiwan O SA T I ndexSource: FactSet as of 9/25/15; Note: Taiwan OSAT Index includes Advanced Semiconductor Engineering Inc., Siliconware Precision Industries Co. Ltd., Powertech Technology Inc., Chipbond Technology Corporation, King Yuan ELECTRONICS CO., LTD.Project Island
Wall Street Investor PerspectivesSentiment on Barbados Sentiment on TahitiRatings of %2 2 2 2 2 2 2 2 2 2 2 2 2100%80%60%100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%40%20%0% Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Buy + O verweight Sell + U nderweight A c tual P ric eH old T arget P ric e45 665 334 4 43 3 3 $32 100% $2.00 $30 25% 25% 25% 25% $1.80 80% 33% 33% $28 40%$26 USD Ratings $1.60 USD $24 60%$ $ 100% $1.40 $22 100% 100% 100% 100% 100%$20Price of 40% 75% 75% 75% 75% $1.20Price % 67% 67% 60% $18 20% $1.00$16 $14 0% $0.80 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Buy + O verweight Sell + U nderweight A c tual P ric e H old T arget P ric eSelected Research Analyst Commentary“With special committees having been formed… the process of share structure collapse should be fairly swift with the recent ThaiLin premium (~20%) as a reasonable starting point in our eyes. Further, we expect some announcements on China expansion/investment in the very near term – given the sheer opportunity and that Barbados would take on favored status in China, this is clearly another positive development even despite the maddeningly below seasonal numbers.” – Cowen, 9/10/15“While we believe that the ‘share collapse’ is inevitable, it doesn’t sound like it will be completed until spring 2016, and the China LCD JV opportunity, while promising, is still unclear. The stock is still quite inexpensive (8x C16 EV/EPS) at last night’s closing price, but needs fundamental and company-specific catalysts to propel the stock.”– Craig-Hallum, 8/11/15Source: FactSet as of 9/25/15 and Wall Street researchManagement said on the call that the special committee plans to engage third-party advisors by the end of Aug or early Sep. It made no further comment on other timeline or share swap ratio. We still expect the merger to be earnings accretivefor Tahiti shareholders given the potential outstanding share reduction (an incentive for shareholders to approve) and ~0.2 pp better GM on no licensing fees. We believe a 100% share swap (no cash involved, dilutive to shareholders) is unlikely to receive shareholder and regulatory approval.” – Credit Suisse, 8/11/15“We stay overweight, however, given the company’s commitment to create more value to shareholders by streamlining the group; in addition, the stock is trading at the low end of its historical range, at 10.5x and 8.5x our 2015/16E EPS, respectively.”– Morgan Stanley, 8/11/15Project Island
Pro Forma Shareholder Analysis
Cross-Holders AnalysisTop 25 Shareholders(Shares in Millions)Barbados # Name Shares % of Total # 1 The Baupost Group LLC 3.3 11.5% 1 2 Old Mutual Plc 1.9 6.8% 2 3 Soros Fund Management LLC 1.4 4.8% 3 4 Siliconware Precision Industries Co., Ltd. 1.2 4.4% 4 5 Renaissance Technologies Holdings Corp. 1.1 3.7% 5 6 Millennium Management LLC 0.7 2.4% 6 7 Ecofin Holdings Ltd. 0.7 2.3% 7 8 Kennedy Capital Management, Inc. 0.6 2.1% 8 9 Teachers Insurance & Annuity Association of America 0.6 1.9% 9 10 Nokomis Capital LLC 0.6 1.9% 10 11 Altalis Capital Management LLC 0.5 1.9% 11 12 Krevlin Management, Inc. 0.5 1.8% 12 13 Leucadia National Corp. 0.5 1.8% 13 14 Balyasny Asset Management LP 0.4 1.6% 14 15 CHENG SHIH JYE 0.4 1.4% 15 16 Tokyo Seimitsu Co., Ltd. 0.4 1.3% 16 17 DLS Capital Management LLC 0.3 1.1% 17 18 AJO LP 0.3 0.9% 18 19 Philadelphia Trading, Inc. 0.3 0.9% 19 20 Seizert Capital Partners LLC 0.3 0.9% 20 21 GWA LLC 0.2 0.8% 21 22 Sensato Investors LLC 0.2 0.7% 22 23 GFH LP 0.2 0.6% 23 24 Morgan Stanley 0.2 0.6% 24 25 OxFORD Asset Management LLP 0.1 0.5% 25Tahiti Name Shares % of Total Barbados 522.1 58.0% Siliconware Precision Industries Co., Ltd. 132.8 14.7% Government of Singapore 33.9 3.8% CHEN YI FEN 13.5 1.5% LIN FAMILY 12.0 1.3% Hung Yan Co. Ltd. 9.3 1.0% United Microelectronics Corp. 8.5 0.9% CHENG SHIH JYE 5.1 0.6% Yuanta Financial Holding Co. Ltd. 5.0 0.6% Reyl & Cie SA 2.8 0.3% Cathay Financial Holding Co., Ltd. 2.0 0.2% Old Mutual Plc 1.7 0.2% SinoPac Financial Holdings Co., Ltd. 1.4 0.2% Teachers Insurance & Annuity Association of America 0.9 0.1% Dimensional Fund Advisors LP 0.8 <0.1% First Financial Holding Co., Ltd. 0.5 <0.1% Schroders Plc 0.5 <0.1% Ameriprise Financial, Inc. 0.4 <0.1% Stichting Pensioenfonds ABP 0.4 <0.1% Taishin Financial Holdings Co., Ltd. 0.2 <0.1% Shin Kong Financial Holding Co. Ltd. 0.2 <0.1% State Street Corp. 0.1 <0.1% Axiom Investors LP 0.1 <0.1% VON UND ZU LIECHTENSTEIN FAMILY 0.1 <0.1% BlackRock, Inc. 0.0 <0.1%Indicates crossholderSource: FactSet as of 9/25/15Note: Based on shares outstanding as reported
Pro Forma Ownership of Tahiti Based on 17 September OfferPro Forma Ownership% of Shares Shares Outstanding Siliconware Precision Industries Co., Ltd. 155,556,466 17.2% The Baupost Group LLC 60,138,266 6.7% Old Mutual Plc 37,341,706 4.1% Government of Singapore 33,946,000 3.8% Soros Fund Management LLC 25,147,480 2.8% Renaissance Technologies Holdings Corp. 19,254,590 2.1% CHEN YI FEN 13,500,000 1.5% Millennium Management LLC 12,410,327 1.4% CHENG SHIH JYE 12,213,396 1.4% Ecofin Holdings Ltd. 12,109,621 1.3% LIN FAMILY 12,000,000 1.3% Teachers Insurance & Annuity Assoc. of America 11,011,984 1.2% Kennedy Capital Management, Inc. 10,805,796 1.2% Nokomis Capital LLC 10,079,664 1.1% Altalis Capital Management LLC 9,864,223 1.1% Krevlin Management, Inc. 9,330,454 1.0% Hung Yan Co. Ltd. 9,280,000 1.0% Leucadia National Corp. 9,212,860 1.0% United Microelectronics Corp. 8,492,000 0.9% Balyasny Asset Management LP 8,150,963 0.9% Tokyo Seimitsu Co., Ltd. 6,969,641 0.8% DLS Capital Management LLC 5,623,615 0.6% Yuanta Financial Holding Co. Ltd. 5,030,000 0.6% AJO LP 4,711,623 0.5% Philadelphia Trading, Inc. 4,602,620 0.5% Seizert Capital Partners LLC 4,580,896 0.5% GWA LLC 3,938,106 0.4% Sensato Investors LLC 3,605,455 0.4% GFH LP 3,154,862 0.3% Morgan Stanley 2,937,790 0.3% Total - Top 30 Holders 525,000,407 58.2% Others 377,108,525 41.8% Total - All Institutions 902,108,932 100.0%Source: FactSet as of 9/25/15Note: Based on shares outstandingPro Forma Ownership by Type% of Shares Shares Outstanding Short Interest (1,420) (0.0%) Institutional Owners 569,327,468 63.1% Insiders / Stake Holders 185,764,119 20.6% Retail 147,018,765 16.3% Total Shares Outstanding 902,108,932 100.0%16% Institutional Owners (569.3MM)21% Insiders / Stake Holders (185.8MM)63% Retail (147.0MM) Note: Excludes Short InterestPro Forma Ownership by Security TypeTahiti TSECShares 42.0%ADRs 58.0%
ADS Considerations
DS Market Open and Growing as Demand Continues to Increase ? The ADS market is growing at an increasingly fast pace, continuing to fuel U.S. investment in foreign companies:? Companies from more than 80 countries have gained U.S. investor access? More than 2,200 issuers have issued sponsored depository receipts? Approximately 400 depository receipt programs are listed on U.S. exchanges, providing issuing Company with access to new capital ? Foreign investment accounts for nearly 20% of the entire U.S. equity market? U.S. investors are constantly seeking new opportunities for performance alpha and appetite for foreign equities continues to increase as desire for geographic and sector diversification increases2014 Depository Receipt HighlightsCapital Raised Programs Created Volume Traded $37.6 billion raised 77 new programs $3.2 trillion traded$5 8$594 43 $1,229$3323 $1,379 3IPO Follow-on Other/Unlisted U.S. OTC Asia Pacific EMEA Latin America U.S. Listed LSE/LuxSEU.S. Investment in Foreign Equities$7 30% $6 24% 25%21% 20% 21% 20% $5 19% 19% 18% 18% 20%$4 16%14% 15%$3 10% $2 $1 5%$2.6 $3.3 $4.3 $5.2 $2.8 $4.0 $4.9 $4.5 $5.4 $6.4 $6.6 $0 0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Value ($ in Trillions) Equity Holdings as % of Total PortfolioThe market outlook for ADSs continues to be strong reflecting long-standing trends such as international diversification, cross-border M&A (with ability to use ADS as currency), global privatizations, and increased competition for new sources and diversifications of equity capitalSource: Bloomberg, BNY Mellon, ADR.com
ADS Market Open and Growing as Demand Continues to IncreaseTotal Amount of Capital Raised via ADS$70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $21.3 $42.6 $57.3 $14.7 $18.1 $21.9 $15.2 $12.6 $9.4 $37.6 $0.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Total DR Capital Raised ($ in Billions)Liquidity and Depth of ADS Market$4,500 170 180 $4,000 150 146 147 160 142 142$3,500 135 140$3,000 120 $2,500 93 100$2,000 80 57 $1,500 60 $1,000 40 $500 20 $1,657 $3,391 $4,139 $2,808 $3,445 $3,718 $2,656 $2,522 $3,202 $0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014DR Trading Value ($ in Billions) DR Trading Volume (Billions of DRs)Top 10 Sectors in 2014 Top Institutional Holders of Depository Receipts ¹ Sector DR Value ($ in Billions) Firm Name Total ($ in Billions) Oil & Gas $173.1 Fidelity Management & Research Co. $20.0 Internet 164.9 Capital World Investors 17.9 Pharmaceuticals 154.6 Dodge & Cox 17.4 Banks 97.3 Aberdeen Asset Managers 16.1 Telecommunications 78.8 T. Rowe Price Associates 16.1 Food 58.4 Lazard Asset Management 13.1 Beverages 52.8 Capital Research Global Investors 12.3 Mining 51.2 Baillie Gifford & Company 11.4 Semiconductors 44.8 Fisher Investments 10.9 Agriculture 16.5 Franklin Advisers 8.4Source: Bloomberg, BNY Mellon, ADR.com(1) Data as of 12/31/14
Selected Taiwan-Based Semiconductor Companies($ in USD)Taiwan-Based Semiconductor Companies’ ADSsAverage Premium / (Discount) ADS Current Current ADS Current Implied Company Name Taiwan Implied 1-Week 1-Month 6-Months 1-Year Ticker ADS Price Ratio Premium Price PriceTaiwan-Based Semiconductor Companies Taiwan Semiconductor Manufacturing Company Limited NYSE:TSM $20.05 $3.84 1:5 $19.22 4.3% 4.0% (1.4%) (0.3%) (0.4%) Siliconware Precision Industries Co. Ltd. NASDAQ:SPIL 5.99 1.20 1:5 5.98 0.2% 0.1% (3.7%) (2.4%) (2.3%) Advanced Semiconductor Engineering Inc. NYSE:ASX 5.14 1.05 1:5 5.23 (1.7%) (1.0%) (5.9%) (2.7%) (0.9%) AU Optronics Corp. NYSE:AUO 2.94 0.30 1:10 2.99 (1.8%) (0.4%) (3.6%) (1.9%) (2.0%) United Microelectronics Corporation NYSE:UMC 1.61 0.33 1:5 1.66 (2.8%) (0.4%) (3.3%) (2.6%) (3.3%) Semiconductor Mean (0.4%) 0.5% (3.6%) (2.0%) (1.8%) Other Taiwan-Based Companies Chunghwa Telecom Co., Ltd. NYSE:CHT $30.10 $2.97 1:10 $29.66 1.5% 0.5% (3.6%) (2.0%) (2.2%) Overall Mean (0.1%) 0.5% (3.6%) (2.0%) (1.8%)Source: Capital IQ as of 9/25/15Note: Historical exchange rate applied to convert TWD to USD (assumed to be $0.0311 USD/TWD)
Valuation Considerations
Selected Public Company BenchmarkingCY 2015E and 2016E Revenue GrowthCY’15E Median: 2% CY’15E Median: 21% CY’16E Median: 10% 39% 39% CY’16E Median: 28% 35% 33%30% 29% 27% 14% 13% 15% 13% 10%7% 7% 6% 4% 6% 7% 5% 2% 3%(1%) (2%)(8%) (8%) (6%)Tahiti BarbadosCY 2015E EBITDA MarginMedian: 34% Median: 22% 47% 34% 34% 32% 30% 30%25% 23% 22%19% 18% 16%NA Tahiti BarbadosTaiwan OSAT Companies Rest of World OSAT CompaniesSource: Wall Street research and Capital IQ as of 9/25/15; Note: Dark shading represents 2015E, light shading represents 2016E; values in constant currency
Selected Public Company Benchmarking (Cont’d)EV / CY 2015E Revenue and EV / CY 2016E RevenueCY’15E Median: 1.6xCY’16E Median: 1.5xCY’15E Median: 1.6xCY’16E Median: 1.3x2.9x 2.1x 2.3x1.8x 1.6x 1.6x 1.7x 1.8x 1.8x 1.6x 1.5x 1.3x 1.2x 1.1x 1.3x 1.2x 1.1x 1.0x 1.3x 1.2x0.7x 0.7x 0.7x 0.6x 0.5x 0.5xTahiti BarbadosEV / CY 2015E EBITDAMedian: 5.0x Median: 5.2x13.0x 11.6x 5.9x 5.1x 5.0x 5.2x 3.8x 4.0x 3.6x 2.7x 3.1x 2.5xNA Tahiti BarbadosTaiwan OSAT Companies Rest of World OSAT CompaniesSource: Wall Street research and Capital IQ as of 9/25/15; Note: Dark shading represents 2015E, light shading represents 2016E; values in constant currency
Selected Precedent Transactions($ in millions)9/25/15 9/25/15 Announced 11/12/14 11/6/14 10/14/13 12/10/12 12/15/11 6/26/07 3/1/07 2/12/07 2/10/04 DateAcquiror Tahiti Barbados Target 28.7% stake in ChipMOS Taiwan $737.2 $302.4 Enterprise Value $107.5 $1,793.2 $87.2 $84.9 $369.6 $1,683.6 $3,068.1 $1,061.1 $1,494.5EV / LTM Revenue3.5x2.6x Mean: 1.7x 1.9x 1.8x1.1x Median: 1.3x 1.3x 1.3x 1.3x 0.7x 1.0x 0.9xEV / LTM EBITDA16..9xMean: 7.0x 6.8x 66..5x 77..1x 5.9x 55..8x 4.8x Median: 6.2x 3.5x 3.2x3.0x 2.3x 2.2x 0.2x 0.0x NA 0.2x 0.1xSource: Company filings and Capital IQ as of 9/25/15
Proposal Considerations
Evaluating Tahiti’s ProposalEquity ConsiderationBenefits Considerations ? Barbados shareholders “get what currently ? Certain complexities associated with have” ADSs? ADS is a common structure for Taiwan-based companies? Offers a potential to solve HoldCo discountCash ConsiderationOverall ValueADSsCash Out of OptionsPro Forma Financialsand PotentialSynergies? Barbados shareholders get what currently have? Offers fundamental value, an implicit premium to current Barbados share price but no explicit premium to NAV? ADSs typically trade with less of a discount to intrinsic value versus historical Barbados trading levels? ADSs should present less flow back issues versus receiving shares of Tahiti directly? Cashing out options / SARs offers simple structure to consummate the merger? Reduction of overhead costs could improve pro forma earnings? Payout of SAR / options will reduce fully diluted shares outstanding? Asking Barbados shareholders to bear full cost of options / SAR payouts? No premium transaction – not offering value above the intrinsic value of Barbados shares? No certainty that ADSs will trade at less of a discount versus current Barbados shares? Barbados shareholders bear risk of the transaction? Places burden and cost entirely on Barbados shareholders? Overall synergies may be minimal after cost of ADS program fully realized
Precedent Minority Squeeze Out Premiums Paid($ in millions USD, except per share data)Date Transaction Offer Price Offer Premium per ShareEnterprise perAnnounced Acquiror Target Value1 Share 1-Day 1-Week 1-Month Selected Squeeze Out Transactions 4/6/2015 Tesoro Logistics LP QEP Midstream Partners, LP $381.7 $16.57 7.2% 4.2% 4.1% 8/21/2014 HC2 Holdings, Inc. Schuff International, Inc. 23.1 31.49 1.6% 1.6% 8.6% 8/27/2013 Plains All American Pipeline, L.P. PAA Natural Gas Storage, L.P. 1,341.1 23.07 9.6% 11.4% 4.4% 6/16/2011 Angelo, Gordon & Co. C&D Technologies, Inc. 52.7 9.75 18.3% 17.5% 21.1% 3/2/2010 CF Industries Holdings, Inc. Terra Industries Inc. 5,429.7 47.40 15.0% 15.5% 50.0% Median 9.6% 11.4% 8.6% Mean 10.3% 10.0% 17.6%Source: Thomson One and Capital IQ
Case Study: ChipMOS Technologies Acquisition of ThaiLin SemiconductorTransaction Summary ChipMOS Technologies Before / After ThaiLin Merger? On June 17, 2015, ChipMOS Technologies (Taiwan) acquired the remaining 52.5% stake in ThaiLin Semiconductor Corp. for TWD 2.9 Billion? One share of ThaiLin swapped for 0.311 shares of ChipMOS Technologies along with cash consideration? 16% premium to the closing prior to the announcement on November 12, 2014? ChipMOS issued 35.9mn additional shares for this acquisition (4% dilution) but increased its cash position (ThaiLin had net cash as of 1Q15) and reduce the non-controlling interests? Post-merger ThaiLin became a 58% owned subsidiary of ChipMOS Technologies (Bermuda) through ChipMOS Taiwan? The transaction was approved by the Chinese Fair Trade Commission, Financial Supervisory Commission, Taiwan Stock Exchange and Gre Tai Securities MarketThaiLin Semiconductor Corp. Stock Performance$0.90$0.80 $0.80$0.70$0.60$0.50$0.40$0.30$0.20 Aug-12 Aug-13 Jul-14 Jun-15 Source: FactSet as of 8/24/15
Hypothetical Transaction Sensitivity – Same Economic Ownership, Premium Delivered in Cash($ in millions USD, except per share data) Same Economic Ownership, Premium Delivered in CashBased on 17th Sep Tahiti Offer 5.0% 10.0% 15.0% 20.0% 25.0% % Stock / % Cash 90.9% / 9.1% 86.5% / 13.5% 82.6% / 17.4% 79.0% / 21.0% 75.7% / 24.3% 72.7% / 27.3% Consideration to Barbados Current Tahiti Shares Outstanding 900.552 900.552 900.552 900.552 900.552 900.552 Tahiti Shares Owned by Barbados 522.080 522.080 522.080 522.080 522.080 522.080 Barbados Ownership of Tahiti 58.0% 58.0% 58.0% 58.0% 58.0% 58.0% ADSs Issued to Barbados 522.080 522.080 522.080 522.080 522.080 522.080 Barbados Shares Outstanding 28.503 28.503 28.503 28.503 28.503 28.503 Implied Exchange Ratio 18.317x 18.317x 18.317x 18.317x 18.317x 18.317x Pro Forma Tahiti Shares 900.552 900.552 900.552 900.552 900.552 900.552 Tahiti Share Price (in USD)1 $0.98 $0.98 $0.98 $0.98 $0.98 $0.98 Equity Consideration $509.6 $509.6 $509.6 $509.6 $509.6 $509.6 Tahiti Equity Value per Share of Barbados $17.88 $17.88 $17.88 $17.88 $17.88 $17.88 Initial Barbados Cash $60.4 $60.4 $60.4 $60.4 $60.4 $60.4 Less Cash Settled SARs/Options 9.2 10.5 12.6 15.3 18.4 21.7 Plus Additional Cash Consideration 0.0 29.3 59.4 90.1 121.3 152.7 Net Cash to Barbados Shareholders $51.2 $79.2 $107.2 $135.3 $163.3 $191.4 Cash Consideration per Share of Barbados $1.79 $2.78 $3.76 $4.75 $5.73 $6.71 Total Consideration $560.8 $588.8 $616.9 $644.9 $672.9 $701.0 Total Consideration per Share of Barbados $19.67 $20.66 $21.64 $22.63 $23.61 $24.59 Premium to Current Barbados Stock Value ($16.94) 16.1% 22.0% 27.8% 33.6% 39.4% 45.2% Premium to Current Barbados Fundamental Value per Share ($19.67) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Pro Forma Tahiti Enterprise Value $737.2 $737.2 $737.2 $737.2 $737.2 $737.2 Cash 416.4 387.1 357.0 326.3 295.1 263.7 Debt 274.5 274.5 274.5 274.5 274.5 274.5 Implied Equity Value $879.1 $849.8 $819.7 $788.9 $757.8 $726.4 Pro Forma Barbados Equity Ownership 58.0% 58.0% 58.0% 58.0% 58.0% 58.0% 2016E EPS Accretion / (Dilution) 0.0% (0.1%) (0.1%) (0.2%) (0.3%) (0.4%)Source: Capital IQ, Company filings and Wall Street research; Market data as of 9/25/15 (1) Based on exchange rate of 33.038 TWD per USD
Hypothetical Transaction Sensitivity – Lower Economic Ownership, Additional Cash Consideration($ in millions USD, except per share data) Lower Economic Ownership, Additional Cash ConsiderationBased on 17th Sep Tahiti Offer 5.0% 10.0% 15.0% 20.0% 25.0% % Stock / % Cash 90.9% / 9.1% 82.1% / 17.9% 78.4% / 21.6% 75.0% / 25.0% 71.8% / 28.2% 69.0% / 31.0% Consideration to Barbados Current Tahiti Shares Outstanding 900.552 900.552 900.552 900.552 900.552 900.552 Tahiti Shares Owned by Barbados 522.080 522.080 522.080 522.080 522.080 522.080 Barbados Ownership of Tahiti 58.0% 58.0% 58.0% 58.0% 58.0% 58.0% ADSs Issued to Barbados 522.080 495.303 495.303 495.303 495.303 495.303 Barbados Shares Outstanding 28.503 28.503 28.503 28.503 28.503 28.503 Implied Exchange Ratio 18.317x 17.377x 17.377x 17.377x 17.377x 17.377x Pro Forma Tahiti Shares 900.552 873.775 873.775 873.775 873.775 873.775 Tahiti Share Price (in USD)1 $0.98 $0.98 $0.98 $0.98 $0.98 $0.98 Equity Consideration $509.6 $483.5 $483.5 $483.5 $483.5 $483.5 Tahiti Equity Value per Share of Barbados $17.88 $16.96 $16.96 $16.96 $16.96 $16.96 Initial Barbados Cash $60.4 $60.4 $60.4 $60.4 $60.4 $60.4 Less Cash Settled SARs/Options 9.2 10.5 12.6 15.3 18.4 21.7 Plus Additional Cash Consideration 0.0 55.5 85.6 116.3 147.5 178.8 Net Cash to Barbados Shareholders $51.2 $105.3 $133.4 $161.4 $189.5 $217.5 Cash Consideration per Share of Barbados $1.79 $3.70 $4.68 $5.66 $6.65 $7.63 Total Consideration $560.8 $588.8 $616.9 $644.9 $672.9 $701.0 Total Consideration per Share of Barbados $19.67 $20.66 $21.64 $22.63 $23.61 $24.59 Premium to Current Barbados Stock Value ($16.94) 16.1% 22.0% 27.8% 33.6% 39.4% 45.2% Premium to Current Barbados Fundamental Value per Share ($19.67) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Pro Forma Tahiti Enterprise Value $737.2 $737.2 $737.2 $737.2 $737.2 $737.2 Cash 416.4 360.9 330.8 300.1 268.9 237.6 Debt 274.5 274.5 274.5 274.5 274.5 274.5 Implied Equity Value $879.1 $823.6 $793.5 $762.8 $731.6 $700.3 Pro Forma Barbados Equity Ownership 58.0% 55.0% 55.0% 55.0% 55.0% 55.0% 2016E EPS Accretion / (Dilution) 0.0% 2.9% 2.9% 2.8% 2.7% 2.6%Source: Capital IQ, Company filings and Wall Street research; Market data as of 9/25/15 (1) Based on exchange rate of 33.038 TWD per USD
Next Steps
Next Steps? Prepare a formal written response and counter-proposal to the 17 September offer? Consider requesting premium to NAV – paid in cash? Consider requesting that SARS/options are rolled forward into ADSs? Ask clarifying questions to gain better understanding of the following:1. Pro forma impact to Tahiti income statement and estimated synergies (including one-time transaction costs)2. Requirements regarding balance sheet expected to be delivered by Barbados at closing, and proposed recourse by Tahiti for variances3. Rationale for paying out ADSs / stock option in cash versus other alternatives? Discuss due diligence process
Appendix
Ownership by Ultimate Parent – BarbadosOwnership Summary% of Shares Shares Outstanding Short Interest (26,017) (0.1%) Institutional Owners 16,857,167 59.1% Insiders / Stake Holders 781,590 2.7% Retail 10,912,260 38.3% Total Shares Outstanding 28,525,000 100.0% Float 27,754,825 97.3%Institutional Owners (16.9MM)38%Insiders / Stake Holders (0.8MM)59% Retail (10.9MM)3%Note: Excludes Short InterestInsider Ownership% of Shares Shares Outstanding CHENG SHIH JYE 391,084 1.4% Tokyo Seimitsu Co., Ltd. 380,506 1.3% HE ZHENGXU 10,000 0.0% Total - All Insiders 781,590 2.7%Source: FactSet as of 9/25/15Note: Based on shares outstandingInstitutional Ownership – Top 20% of Shares Shares Outstanding The Baupost Group LLC 3,283,235 11.5% Old Mutual Plc 1,945,265 6.8% Soros Fund Management LLC 1,372,921 4.8% Siliconware Precision Industries Co., Ltd. 1,243,749 4.4% Renaissance Technologies Holdings Corp. 1,051,200 3.7% Millennium Management LLC 677,539 2.4% Ecofin Holdings Ltd. 661,122 2.3% Kennedy Capital Management, Inc. 589,940 2.1% Teachers Insurance & Annuity Association of America 550,915 1.9% Nokomis Capital LLC 550,297 1.9% Altalis Capital Management LLC 538,535 1.9% Krevlin Management, Inc. 509,394 1.8% Leucadia National Corp. 502,974 1.8% Balyasny Asset Management LP 445,000 1.6% Tokyo Seimitsu Co., Ltd. 380,506 1.3% DLS Capital Management LLC 307,020 1.1% AJO LP 257,230 0.9% Philadelphia Trading, Inc. 251,279 0.9% Seizert Capital Partners LLC 250,093 0.9% GWA LLC 215,000 0.8% Total - Top 20 Institutions 15,583,214 54.6% Others 1,273,953 4.5% Total - All Institutions 16,857,167 59.1%
Ownership by Ultimate Parent – TahitiOwnership Summary% of Shares Shares Outstanding Short Interest - - % Institutional Owners 45,921,245 5.1% Insiders / Stake Holders 708,207,358 78.6% Retail 146,423,013 16.3% Total Shares Outstanding 900,551,616 100.0% Float 192,718,046 21.4%5%16% Institutional Owners (45.9MM)Insiders / Stake Holders (708.2MM) Retail (146.4MM) 79% Note: Excludes Short InterestInsider Ownership% of Shares Shares Outstanding Barbados 522,080,358 58.0% Siliconware Precision Industries Co., Ltd. 132,775,000 14.7% CHEN YI FEN 13,500,000 1.5% Hung Yan Co. Ltd. 9,280,000 1.0% United Microelectronics Corp. 8,492,000 0.9% LIN WEN CHIN 6,000,000 0.7% LIN WEN QING 6,000,000 0.7% CHENG SHIH JYE 5,050,000 0.6% Yuanta Financial Holding Co. Ltd. 5,030,000 0.6% Total - All Insiders 708,207,358 78.6%Source: FactSet as of 9/25/15Note: Based on shares outstandingInstitutional Ownership% of Shares Shares Outstanding Government of Singapore 33,946,000 3.8% Reyl & Cie SA 2,753,396 0.6% Cathay Financial Holding Co., Ltd. 1,980,000 0.2% Old Mutual Plc 1,710,731 0.2% SinoPac Financial Holdings Co., Ltd. 1,380,000 0.2% Teachers Insurance & Annuity Association of America 921,000 0.1% Dimensional Fund Advisors LP 780,075 0.1% First Financial Holding Co., Ltd. 485,000 0.1% Schroders Plc 455,000 0.1% Ameriprise Financial, Inc. 404,000 0.0% Stichting Pensioenfonds ABP 357,124 0.0% Taishin Financial Holdings Co., Ltd. 170,000 0.0% Shin Kong Financial Holding Co. Ltd. 159,000 0.0% State Street Corp. 149,642 0.0% Axiom Investors LP 81,000 0.0% VON UND ZU LIECHTENSTEIN FAMILY 71,000 0.0% BlackRock, Inc. 43,000 0.0% Manulife Financial Corp. 23,000 0.0% Marsh & McLennan Cos., Inc. 20,526 0.0% The Bessemer Group, Inc. 12,751 0.0% Total - Top 20 Institutions 45,902,245 5.1% Others 19,000 0.0% Total - All Institutions 45,921,245 5.1%
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