ASE rejects Carlyle's buyout offer after the companies could not agree on a higher price The Carlyle Group scrapped a US$5.5 billion deal to buy Advanced Semiconductor Engineering (ASE), the world’s largest chip packaging and testing company, ASE said Tuesday.The proposed offer, which was never made formal because the companies were awaiting regulatory approval by Taiwan before moving forward, was dropped after the companies could not agree on a higher offering price.During discussions between an ASE evaluation committee set up to ensure a fair deal for shareholders, and Carlyle, the committee asked for a higher offer because it believed the original price of NT$39 (US$1.18) per share to acquire 100 percent of ASE was not enough. Carlyle countered with a slight increase, to NT$39.50 per share, but the new offer was also rejected as too low by ASE. Carlyle declined to bid any higher, opting instead to cancel the proposal, ASE said in a statement.The price negotiations between the two companies were complex because when Carlyle made the original NT$39 per share proposal, it was far higher than ASE’s share price at the time. But after the Carlyle proposal, the stock prices of a number of chip packaging and testing companies in Asia took off, on the view that a Carlyle deal meant that these chip makers were undervalued.ASE shares had been trading between NT$30.45 and NT$33.10 until just a few days before the proposal was made. The first trading day after the offer, Nov. 27, ASE shares leaped to NT$37.95 each. ASE’s main rival in Taiwan, Siliconware Precision Industries Co., saw its shares leap to NT$51.3 on Nov. 27, from NT$48 before the deal was announced, and they’ve continued to rise. On Tuesday, Siliconware shares had hit NT$70.8 as investors took a new look at the sector, while ASE’s were at NT$41.5 on hopes Carlyle might increase its offer.The scrapping of the deal doesn’t appear to have hurt ASE, either. The company also has shares listed on the New York Stock Exchange, which was open when the cancellation of the proposal was announced. ASE shares closed at US$6.30 each, up US$0.05 on the day. Technology Industry