Acer 2008 Annual Report Download - page 20

Acer Incorporated 2008 Annual Report36
Capital and Shares
Acer Incorporated 2008 Annual Report 37
4.4 Global Depository Receipts (GDRs) Issuance (March 31, 2009)
Date of issuance
Description November 1,1995 July 23, 1997
Date of issuance November 1,1995 July 23, 1997
Location of issuance and transaction London London
Total amount of issuance US$220,830,000 US$160,600,000
Unit price of issuance US$32.475 US$40.15
Total number of units issued 6,800,000units 4,000,000units
Sources of valuable securities
demonstrated Capital increased in cash Capital increased in cash
Number of valuable securities
demonstrated
Each unit stands for Acer’s 5 common
shares
Each unit stands for Acer’s 5 common
shares
Rights and obligations of GDR holders Same as Acer’s common shareholders Same as Acer’s common shareholders
Consignee None None
Depository organization Citicorp Citicorp
Custodian organization Citibank Taipei Branch Citibank Taipei Branch
Balance not retrieved 9,927,667 units of Global Deposit Receipt as representing
49,638,422 shares of common stocks
Method to allocate fees incurred during
the period of issuance and existence
The expenses incurred by issuance being
taken to offset premium reserve. Expenses
incurred during existence being taken as
expenses of the current term.
The expenses incurred by issuance being
taken to offset premium reserve. Expenses
incurred during existence being taken as
expenses of the current term.
Any key issue for the depository and
custodian agreements None None
Market
Price Per
Share
2008
Highest US$11.50
Lowest US$ 5.95
Average US$ 8.86
Until Mar.
31th, 2009
Highest US$ 7.55
Lowest US$ 5.94
Average US$ 6.65
4.5 Employee Stock Options: (March 31, 2009)
Employee Stock Option Granted First Grant of 2008
Approval Date by the Authority September 15, 2008
Grant Date November 03, 2008
Number of Options Granted 14,000 units
Percentage of Shares Exercisable
to Outstanding Common Shares (%) 0.5297
Option Duration 3 years
Source of Option Shares new Common stocks
Vesting Schedule From the 2nd anniversary of the grant date, except that all or partial options revoked
by the company, 100% vested options can be exercised without conditions
Shares Exercised 0
Value of Shares Exercised NT$ 0
Shares Unexercised 14,000,000 shares
Adjusted Exercise Price Per Share NT$ 25.28
Percentage of Shares Unexercised
to Outstanding Common Shares (%) 0.52975
Impact on Shareholders’ Equity Dilution to Shareholders’ Equity is limited.
4.6 Issuance of New Shares Due to Company’s Mergers and Acquisitions:
4.6.1 Underwriter’s Opinion for the Mergers and Acquisitions
1. Underwriter’s Opinion of the Impact of Acer’s Operating Business, Financial Aspect and Stock Holders’ Equity
(1) Impact of Acer’s Operating Business after Acquisition
Acer ranked among the world’s top ve PC vendors, and E-ten was a leading vendor of smart handheld devices.
The merger of the two companies was anticipated to expand Acer’s product offering and client base, and
increase sales.
When E-ten became a wholly-owned subsidiary of Acer and merged its R&D resources, the launch of Acer
branded smartphones in Q4 2008 immediately enhanced our product offering in the mobile Internet device (MID)
market segment.
In Q4 2008, smartphone sales increased to NT$110.24 billion, representing 10.69% on-year growth. This
signicant increase goes to prove the new synergies that were expected, in terms of expanded product offering
and client base.
(2) Financial Impact on Acer after Acquisition
The acquisition of E-ten not only beneted Acer in terms of technology in the MID segment, but also enhanced
our scale of procurement. With the greater scale, Acer was able to negotiate better costs and reect the savings
in our product competitiveness.
On the balance sheet, Acer issued 168,158,878 new shares for this acquisition, and increased long term
investments by NT$8.7 billion. Growth in the Q4 2008 sales again shows the acquisition has increased Acer’s
protability.
(3) Inuence on Stockholders’ Equity after Acquisition
As for stockholder’s equity, Acer issued 168,158,878 new shares in exchange for 179,930,000 E-ten shares;
hence Acer’s long term investment increased by NT$8.7 billion and then increase its book value per share.
Overall, the acquisition has a positive impact on Acer stockholder’s equity.
(4) Evaluation of the Acquisition
The date of Acer’s and E-ten’s share conversion was September 1, 2008, and the Company has issued the
shares and registered on October 14, 2008. After this acquisition, both sides will gain better purchasing
bargaining power through Acer’s supply chain and reduce the overall purchase cost so that the company can
increase its stockholder’s equity and protability. Both sides also can enhance company’s competitiveness and
profitability by sharing resources of financial, business, channels, purchasing, R&D and Acer’s global brand
image. It’s foreseen that the coalition synergy will gradually emerge.
2. Execution Update and Impact of Acer’s Stock Holders’ Equity of the Unachieved Goals: Not applicable.
4.6.2 Resolutions of Mergers and Acquisitions in the Meeting of the Board of Directors in the
Previous Year: None