LONDON – Fabless consumer chip company MediaTek Inc. has withdrawn an application to raise cash by issuing shares, casting doubt on a plan to merge with local Taiwan rival MStar Semiconductor Inc., according to reports referencing Taiwan's Financial Supervisory Commission as their source.
MediaTek (Hsinchu, Taiwan) said in a statement that it had withdrawn the new share application because it was postponing the merger to May 1 from the previous target date of Jan. 1, according to a Focus Taiwan report.
MediaTek successfully concluded a tender offer to acquire a 48 percent stake in MStar (Hsinchu, Taiwan) in August 2012. The latest moves were intended to complete the acquisition of the smaller rival, a Focus Taiwan report said.
MediaTek and MStar are both public companies and leading fabless chip companies. Both make SoCs that go in smartphones and other consumer and multimedia electronics. Mediatek had planned to issue about 221 million shares for the purpose of acquiring MStar.
The delay has been caused by an inability to secure approval for the deal from foreign countries, including China and South Korea, which have cited anti-trust concerns, the Focus Taiwan report said.
MediaTek is expected to re-apply to issue new shares once it has received the approvals it deems necessary although there are concerns that the plan could fall apart, the reports said.