MStar Jumps With MediaTek on Merger Speculation

Mstar Semiconductor Inc. shares surged the most in almost seven months on speculation Chinese antitrust authorities may approve a merger with MediaTek Inc.

MStar jumped 6.7 percent to close at NT$230 in Taipei, its biggest gain since Aug. 1. MediaTek rose 3.1 percent to NT$336.50, its highest close since Dec. 17. The benchmark Taiex index retreated 0.5 percent.

“There’s speculation in the market China antitrust authorities may approve the merger soon,” Wenwen Wang, an analyst at Jih Sun Securities Co., said in a phone interview from Taipei today. “This boosted the stocks, as the merger had been delayed for some time because of their objection.”

The two companies, which together design more than 70 percent of the chips used in TVs globally, announced the plan in June. They need antitrust approvals from China and South Korea because the two countries account for a big portion of their revenue and could threaten local industry, according to Vickie Hsieh, an analyst at President Capital Management Co. in Taipei.

Yao Jian, a spokesman at China’s Ministry of Commerce, didn’t immediately answer a call to his office. MediaTek Chief Financial Officer David Ku and public relations officers weren’t able to comment because they were in meetings.

MStar Chief Financial Officer Lin Hanfei didn’t answer two calls to his office. An official from the investor relations office, who declined to be named because she’s not authorized to speak to the press, said there’s no progress on the deal.

China accounts for about 60 percent to 70 percent of MediaTek’s revenue and 50 percent of Mstar’s revenue, Hsieh said in a phone interview today. South Korea accounts for about 30 percent of Mstar’s sales, she said.

(Corrects analyst name in third paragraph.)
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