SINGAPORE--(BUSINESS WIRE)--Advanced Technology Investment Company LLC (ATIC) of Abu Dhabi and Chartered Semiconductor Manufacturing (Chartered) of Singapore today announced a definitive agreement whereby ATIC would acquire Chartered, one of the world’s top dedicated semiconductor foundries.
Offer Details
The proposed acquisition will be effected by way of a scheme of arrangement under section 210 of the Companies Act of Singapore, subject to the approval of Chartered shareholders and the sanction of the High Court of Singapore. The transaction is expected to close during the fourth quarter of 2009. Completion of the transaction will be subject to customary conditions, such as regulatory and shareholder approvals. Details can be found in the joint scheme announcement that has been filed with the Singapore Exchange Securities Trading Limited (SGX), as well as in the scheme document to be sent to Chartered shareholders.
Under this scheme of arrangement, each Chartered ordinary share will be acquired by ATIC for a cash consideration of S$2.68 per share. The transaction represents an equity value of approximately S$2.5 billion (US$1.8 billion) and a total value of approximately S$5.6 billion (US$3.9 billion), including debt and convertible redeemable preference shares of approximately S$3.1 billion (US$2.2 billion) as of June 30, 2009. The price represents a premium of 14.2 percent to its 30 trading-day volume weighted average price, 26.8 percent to its 90 trading-day volume weighted average price and 44.2 percent to its 6-month volume weighted average price on the SGX. The estimated amount of consideration for each American Depositary Share ("ADSs") is US$18.641. The actual amount per ADS that ADS holders will receive will depend on the applicable prevailing exchange rate, less the amount of applicable ADS depositary's fees, taxes and expenses.
ATIC is a technology investment company wholly owned by the government of Abu Dhabi. This acquisition is its second major investment in the semiconductor industry and follows the company’s March 2009 creation of GLOBALFOUNDRIES, a U.S.-headquartered, leading-edge semiconductor manufacturing company and a joint venture with AMD. The acquisition of Chartered will be made through ATIC International Investment Company LLC, a subsidiary of ATIC. Once the transaction is completed, ATIC will be the sole owner of Chartered.
The transaction will allow ATIC to build on the complementary platforms of Chartered and GLOBALFOUNDRIES, with Chartered’s customer relationships and capabilities in both 8-inch and 12-inch fabrication, and GLOBALFOUNDRIES’ advanced technology expertise, capacity profile and global footprint.
“We believe that by having access to ATIC’s long-term capital and related assets, Chartered has an opportunity to bring its skills, capabilities and leadership to the next level,” said Waleed Al Mokarrab, Chairman of ATIC. “By acquiring Chartered, ATIC is expanding its investments in the semiconductor industry which currently consist of a GLOBALFOUNDRIES leading facility in Dresden, Germany and a new, state-of-the-art facility under construction in upstate New York.”
Pending appropriate board approvals, Doug Grose, chief executive officer of GLOBALFOUNDRIES, would serve as CEO of the combined operations, with Chia Song Hwee, CEO of Chartered, serving as chief operating officer. Chia will also spearhead the integration effort.
“Chartered’s board of directors recognizes the efforts of the management team and employees on the considerable progress they have made,” said Jim Norling, chairman of the board of directors at Chartered. “Given the importance of scale and the need for substantial, continued capital investment, and having carefully assessed all strategic options available to Chartered, we believe this transaction provides Chartered shareholders the opportunity to realize their investment. In addition, it enables Chartered to accelerate its goal of becoming a leading player in the semiconductor industry. We have today appointed Deutsche Bank AG, Singapore Branch as an independent financial advisor to advise shareholders on the fairness of the offer, and we will submit the proposal for a shareholder vote.”
Morgan Stanley Asia (Singapore) Pte. and Citigroup Global Markets Singapore Pte. Ltd. serve as joint financial advisors to Chartered, and each provided a fairness opinion to the board of directors of Chartered in connection with the transaction.
Temasek Holdings, which currently owns approximately 62 percent of Chartered’s shares, also fully supports the acquisition and has signed an irrevocable undertaking to vote in support of the transaction.
“Chartered and GLOBALFOUNDRIES will be able to draw on each other’s strengths to enable the next generation of semiconductor innovation, utilizing the value of both companies and the intellectual capital of thousands of skilled employees,” said Ibrahim Ajami, CEO of ATIC. “Chartered and GLOBALFOUNDRIES are well positioned to meet the growing chip demand to come from billions of new mobile phones, cars, televisions, computers and other devices.”
RESPONSIBILITY STATEMENT
The directors of Chartered Semiconductor Manufacturing Ltd (Chartered) (including those who may have delegated detailed supervision of the preparation of this Press Release) have taken all reasonable care to ensure that the facts stated and opinions expressed in this Press Release are fair and accurate and no material facts have been omitted from this Press Release, and they jointly and severally accept responsibility accordingly. Where any information has been extracted from published or publicly available sources, the sole responsibility of the directors of Chartered has been to ensure through reasonable enquiries, that such information is accurately extracted from such sources or, as the case may be, reflected or reproduced in this Press Release.
The directors of both the Advanced Technology Investment Company LLC (ATIC) and ATIC International Investment Company LLC (including those who may have delegated detailed supervision of the preparation of this Press Release) have taken all reasonable care to ensure that the facts stated and opinions expressed in this Press Release are fair and accurate and no material facts have been omitted from this Press Release, and they jointly and severally accept responsibility accordingly. Where any information has been extracted from published or publicly available sources, the sole responsibility of the directors of ATIC and the directors of ATIC International Investment Company LLC has been to ensure through reasonable enquiries, that such information is accurately extracted from such sources or, as the case may be, reflected or reproduced in this Press Release.
Morgan Stanley Asia (Singapore) Pte. and Citigroup Global Markets Singapore Pte. Ltd. serve as joint financial advisors to Chartered and each provided a fairness opinion to the board of directors of Chartered as to the scheme consideration to be paid to the shareholders of Chartered in the transaction, which opinions are based upon the considerations and subject to the qualifications set forth therein.
For more information on the announcement, go to: www.advancedtechnologyic.com and www.charteredsemi.com.
About Chartered
Chartered Semiconductor Manufacturing Ltd. (Nasdaq:CHRT)(SGX:CHARTEREDSC), one of the world’s top dedicated semiconductor foundries, offers leading-edge technologies down to 40/45 nanometer (nm), enabling today’s system-on-chip designs. The company further serves its customers’ needs through a collaborative, joint development approach on a technology roadmap that extends to 22nm. Chartered’s strategy is based on open and comprehensive design enablement solutions, manufacturing enhancement strategies, and a commitment to flexible sourcing. In Singapore, the company owns or has an interest in six fabrication facilities, including a 300mm fabrication facility and five 200mm facilities. Information about Chartered can be found at www.charteredsemi.com.
About ATIC
The Advanced Technology Investment Company (ATIC) was created in 2008. A technology investment company wholly owned by the Government of Abu Dhabi, ATIC is focused on making significant investments in the advanced technology sector, both locally and internationally. Its mandate is to generate returns that deliver long-term benefits to the Emirate of Abu Dhabi.
ATIC seeks to leverage the unique advantages it enjoys as an investor from the Emirate of Abu Dhabi to identify and realize long-term investment opportunities in the highly competitive and capital-intensive advanced technology sector. These advantages include significant and reliable capital, a patient investment philosophy, and a subsequently long-term investment horizon. For more information about ATIC visit www.advancedtechnologyic.com
Came across this interesting article and thought it's worth sharing:
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What was I thinking?
If there's one question that investors have asked themselves over the past year and a half, it's that one. If only I had acted differently, they say. If only, if only, if only.
Yet here's the problem: While we know that we made investment mistakes, and vow not to repeat them, most people have only the vaguest sense of what those mistakes were, or, more important, why they made them. Why did we think and feel and behave as we did? Why did we act in a way that today, in hindsight, seems so obviously stupid? Only by understanding the answer to these questions can we begin to improve our financial future.
This is where behavioral finance comes in. Most investors are intelligent people, neither irrational nor insane. But behavioral finance tells us we are also normal, with brains that are often full and emotions that are often overflowing. And that means we are normal smart at times, and normal stupid at others.
The trick, therefore, is to learn to increase our ratio of smart behavior to stupid. And since we cannot (thank goodness) turn ourselves into computer-like people, we need to find tools to help us act smart even when our thinking and feelings tempt us to be stupid.
Let me give you one example. Investors tend to think about each stock we purchase in a vacuum, distinct from other stocks in our portfolio. We are happy to realize "paper" gains in each stock quickly, but procrastinate when it comes to realizing losses. Why? Because while regret over a paper loss stings, we can console ourselves in the hope that, in time, the stock will roar back into a gain. By contrast, all hope would be extinguished if we sold the stock and realized our loss. We would feel the searing pain of regret. So we do pretty much anything to avoid that pain—including holding on to the stock long after we should have sold it. Indeed, I've recently encountered an investor who procrastinated in realizing his losses on WorldCom stock until a letter from his broker informed him that the stock was worthless.
Successful professional traders are subject to the same emotions as the rest of us. But they counter it in two ways. First, they know their weakness, placing them on guard against it. Second, they establish "sell disciplines" that force them to realize losses even when they know that the pain of regret is sure to follow.
So in what other ways do our misguided thoughts and feelings get in the way of successful investing—not to mention increasing our stress levels? And what are the lessons we should learn, once we recognize those cognitive and emotional errors? Here are eight of them.
No. 1
Goldman Sachs is faster than you.
There is an old story about two hikers who encounter a tiger. One says: There is no point in running because the tiger is faster than either of us. The other says: It is not about whether the tiger is faster than either of us. It is about whether I'm faster than you. And with that he runs away. The speed of the Goldman Sachses of the world has been boosted most recently by computerized high-frequency trading. Can you really outrun them?
It is normal for us, the individual investors, to frame the market race as a race against the market. We hope to win by buying and selling investments at the right time. That doesn't seem so hard. But we are much too slow in our race with the Goldman Sachses.
So what does this mean in practical terms? The most obvious lesson is that individual investors should never enter a race against faster runners by trading frequently on every little bit of news (or rumors).
Instead, simply buy and hold a diversified portfolio. Banal? Yes. Obvious? Yes. Typically followed? Sadly, no. Too often cognitive errors and emotions get in our way.
No. 2
The future is not the past, and hindsight is not foresight.
Wasn't it obvious in 2007 that financial institutions and financial markets were about to collapse? Well, it was not obvious to me, and it was probably not obvious to you, either. Hindsight error leads us to think that we could have seen in foresight what we see only in hindsight. And it makes us overconfident in our certainty about what's going to happen.
Want to check the quality of your foresight? Write down in permanent ink your forecast of tomorrow's stock prices. Do that each day for a year and check the accuracy of your predictions. You are likely to find that your foresight is not nearly as good as your hindsight.
Some prognosticators say that we are now in a new bull market and others say that this is only a bull bounce in a bear market. We will know in hindsight which prognostication was right, but we don't know it in foresight.
When I hear in my mind's ear a voice that says that the stock market is sure to zoom or plunge, I activate my "noise-canceling" device rather than go online and trade. You might wish to install this device in your mind as well.
No. 3
Take the pain of regret today and feel the joy of pride tomorrow.
Emotions are useful, even when they sting. The pain of regret over stupid comments teaches presidents and the rest of us to calibrate our words more carefully. But sometimes emotions mislead us into stupid behavior. We feel the pain of regret when we find, in hindsight, that our portfolios would have been overflowing if only we had sold all the stocks in 2007. The pain of regret is especially searing when we bear responsibility for the decision not to sell our stocks in 2007. We are tempted to alleviate our pain by shifting responsibility to our financial advisers. "I am not stupid," we say. "My financial adviser is stupid." Financial advisers are sorely tempted to reciprocate, as the adviser in the cartoon who says: "If we're being honest, it was your decision to follow my recommendation that cost you money."
No. 4
Investment success stories are as misleading as lottery success stories.
Have you ever seen a lottery commercial showing a man muttering "lost again" as he tears his ticket in disgust? Of course not. What you see instead are smiling winners holding giant checks.
Lottery promoters tilt the scales by making the handful of winners available to our memory while obscuring the many millions of losers. Then, once we have settled on a belief, such as "I'm going to win the lottery," we tend to look for evidence that confirms our belief rather than evidence that might refute it. So we figure our favorite lottery number is due for a win because it has not won in years. Or we try to divine—through dreams, horoscopes, fortune cookies—the next winning numbers. But we neglect to note evidence that hardly anybody ever wins the lottery, and that lottery numbers can go for decades without winning. This is the work of the "confirmation" error.
What is true for lottery tickets is true for investments as well. Investment companies tilt the scales by touting how well they have done over a pre-selected period. Then, confirmation error misleads us into focusing on investments that have done well in 2008.
Lottery players who overcome the confirmation error conclude that winning lottery numbers are random. Investors who overcome the confirmation error conclude that winning investments are almost as random. Don't chase last year's investment winners. Your ability to predict next year's investment winner is no better than your ability to predict next week's lottery winner. A diversified portfolio of many investments might make you a loser during a year or even a decade, but a concentrated portfolio of few investments might ruin you forever.
No. 5
Neither fear nor exuberance are good investment guides.
A Gallup Poll asked: "Do you think that now is a good time to invest in the financial markets?" February 2000 was a time of exuberance, and 78% of investors agreed that "now is a good time to invest." It turned out to be a bad time to invest. March 2003 was a time of fear, and only 41% agreed that "now is a good time to invest." It turned out to be a good time to invest. I would guess that few investors thought that March 2009, another time of great fear, was a good time to invest. So far, so wrong. It is good to learn the lesson of fear and exuberance, and use reason to resist their pull.
No. 6
Wealth makes us happy, but wealth increases make us even happier.
John found out today that his wealth fell from $5 million to $3 million. Jane found out that her wealth increased from $1 million to $2 million. John has more wealth than Jane, but Jane is likely to be happier. This simple insight underlies Prospect Theory, developed by Daniel Kahneman and Amos Tversky. Happiness from wealth comes from gains of wealth more than it comes from levels of wealth. While gains of wealth bring happiness, losses of wealth bring misery. This is misery we feel today,
whether our wealth declined from $5 million to $3 million or from $50,000 to $30,000.
We'll have to wait a while before we recoup our recent investment losses, but we can recoup our loss of happiness much faster, simply by framing things differently. John thinks he's a loser now that he has only $3 million of his original $5 million. But John is likely a winner if he compares his $3 million to the mountain of debt he had when he left college. And he is a winner if he compares himself to his poor neighbor, the one with only $2 million.
In other words, it's all relative, and it doesn't hurt to keep that in mind, for the sake of your mental well-being. Standing next to people who have lost more than you and counting your blessings would not add a penny to your portfolio, but it would remind you that you are not a loser.
No. 7
I’ve only lost my children’s inheritance.
Another lesson here in happiness. Mental accounting—the adding and subtracting you do in your head about your gains and losses—is a cognitive operation that regularly misleads us. But you can also use your mental accounting in a way that steers you right.
Say your portfolio is down 30% from its 2007 high, even after the recent stock-market bounce. You feel like a loser. But money is worth nothing when it is not attached to a goal, whether buying a new TV, funding retirement, or leaving an inheritance to your children or favorite charity.
A stock-market crash is akin to an automobile crash. We check ourselves. Is anyone bleeding? Can we drive the car to a garage, or do we need a tow truck? We must check ourselves after a market crash as well. Suppose that you divide your portfolio into mental accounts: one for your retirement income, one for college education of your grandchildren, and one for bequests to your children. Now you can see that the terrible market has wrecked your bequest mental account and dented your education mental account, but left your retirement mental account without a scratch. You still have all the money you need for food and shelter, and you even have the money for a trip around the country in a new RV. You might want to affix to it a new version of the old bumper sticker: "I've only lost my children's inheritance."
So here's my advice: Ask yourself whether the market damaged your retirement prospects or only deflated your ego. If the market has damaged your retirement prospects, then you'll have to save more, spend less or retire later. But don't worry about your ego. In time it will inflate to its former size.
No. 8
Dollar-cost averaging is not rational, but it is pretty smart.
Suppose that you were wise or lucky enough to sell all your stocks at the top of the market in October 2007. Now what? Today it seems so clear that you should not have missed the opportunity to get back into the market in mid-March, but you missed that opportunity. Hindsight messes with your mind and regret adds its sting. Perhaps you should get back in. But what if the market falls below its March lows as soon as you get back in? Won't the sting of regret be even more painful?
Dollar-cost averaging is a good way to reduce regret—and make your head clearer for smart investing. Say you have $100,000 that you want to put back into stocks. Divide it into 10 pieces of $10,000 each and invest each on the first Monday of each of the next 10 months. You'll minimize regret. If the stock market declined as soon as you have invested the first $10,000 you'll take comfort in the $90,000 you have not invested yet. If the market increases you'll take comfort in the $10,000 you have invested. Moreover, the strict "first Monday" rule removes responsibility, mitigating further the pain of regret. You did not make the decision to invest $10,000 in the sixth month, just before the big crash. You only followed a rule. The money is lost, but your mind is almost intact.
Things could be a lot worse.
--Mr. Statman is a professor of finance at Santa Clara University in Santa Clara, Calif. He can be reached at reports@wsj.com.
I think I judged a little too quickly on POSB myhome fund earlier.
The key attraction in this fund is actually the auto rebalancing feature that it offers. There are 2 plans to choose from, homesteady plan (20% in DBS STI ETF 100 and 80% in ABF Singapore Bond ETF) and homebalanced plan (50% into each).
Now, since stocks and bonds usually go in different directions, when one zig, the other zag, having these 2 asset classes in your portfolio allows for a strategy called rebalancing. What this does is very simply balance your 2 ETFs back to the allocation you chose, say homebalanced, 50% into each. So when the stocks index is not doing well for example, the bonds index will probably produce more, making the portfolio imbalance. Now, what rebalancing does is, as the name suggests, balance it back to 50-50.
What this achieves is this, a portion of the bond index that is doing well are sold off at a price when it is high and this amount of income is reinvested into the not-doing-so-well stocks index, where it is now bought at a low price. And the reverse also applies. So, by regularly doing this rebalancing or should I say sell-high-buy-low between these 2 asset funds, you are maximizing your returns. This also forms the basis of why diversifying is so important; to allow you to sell whatever is high and buy whatever is low, increasing your returns and lowering the risk at the same time.
Of course, you can say that investors can rebalance their portfolios even if they buy the ETFs direct. But, for one thing, I think not many people have the discipline to do it. And also, it also incurs more cost when you sell and buy with brokerage. Now, this fund does it automatically and somewhat justifying the management cost. But it is if and only if we are talking about small investment, say less than 10k. Anything above that, the fees will be too much to chew on and you are better off doing it yourself.
Furthermore, I believe there is also a regular monthly investment option ($100 minimum) which can be seen as a saving cum investment thingy. But, what this option really helps to achieve is dollar-cost-averaging. This means, buying more units when the price is low and buying fewer units when the price is high. For example with a 100 dollars regular investment, the first month when the price is at $5, you buy 20 units. And comes next month, if the price decreases to $2, you buy 50 more units. The average price of the 70 units you bought with 200 dollars is thus averaged to $2.86. This means, you do not have to worry much about market timing.
So my opinion is that this product is good for investors with low starting capital or those who wants to invest little on a regular basis. Other than this, please do it yourself and do your own math..
Last week, a couple of colleagues of mine was discussing about which stocks are good to buy and one of them was complaining about a stock she got dropping below the price she bought when she went in and pondering whether to sell it or hope for it to increase back up. She said that she regretted the last time the stocks went up to a certain price and she hesitated in selling, hoping it will go up more so that she can earn more. In other words, she was trying to speculate, very much like gambling and I really doubt she made an informed choice in picking that stock as she merely followed her friend as “it’s a good buy”. I was recommending her to look into something like STI ETF as it offers high diversification and generally lower risk with decent returns in the long term. She frowned upon that and the reason was that "it’s so slow…", meaning low rate of returns.
Coincidentally, a friend also supported the idea of index investing over a meal during the weekend. Also, kr commented in line of this topic in my previous post regarding the POSB myhomefund. So what are the advantages of investing into ETFs like STI ETF? For me, it’s really the simplicity. ETFs (Exchange traded funds) are really just funds that track a certain index, say for example the STI, that are traded on the stock exchange just like any other stocks and it has a generally lower cost as compared to mutual funds as it is passively managed. Furthermore, index like the STI already has a diversified portfolio with a large basket of investment which means the risk is being spread out.
This means you do not need to research very deeply into companies’ financial reports and meticulously pick the correct one. Of course, the trade off is of a lower return. So, whether to go for ETF or the individual stocks, it really depends on a person’s risk appetite, whether he can stomach the ride on the volatility of the stocks market and whether or not he has got the holding power. Having said that however, I do agree that I should take advantage of the fact that time is still with me as I am still young and venture into stocks and not just stay in the comfort zone. After all, I can still afford to lose since I do not have much commitment in my life yet. But I think my point is that it’s good to keep ETFs in my portfolio, just as you should have some bonds and MMFs, etc for sake of diversification.
What you all think?
POSB recently launches a new product, myhome fund, which essentially buys into 2 ETFs and allow investors to choose the proportion of equities (DBS STI ETF 100) and bonds (ABF Singapore Bond Index Fund) according to individual's risk appetite. Yes, ETFs are getting more popular now as compared to unit trust due to its lower fees, so this serves as a good avenue for investors who are looking for some mid to long term investments but doesn't have the time to manage their portfolio.
But hey, isn't STI ETF already diversified and is itself a passively managed fund? What is there for the bank to manage then? Oh yes, there are 2 indexes to manage, so basically the sales charges (3%) and management fees (0.5%) goes to them for rebalancing your portfolio according to the proportion in those 2. It's like buying a fund which have only 2 stocks and you still need to pay all the fees; nice way for the bank to earn money huh?
Why not just buy the ETFs straight through online brokerage? Or why not research abit more and search and invest in some other mutual funds that beats the STI? Or just invest in DBS stocks lar; sure ownage one. lol
