Participants in Chunghwa Telecom's on-off American depositary
receipt (ADR) issue are playing a game of bluff and double bluff as
they amass support for a dignified climbdown on the deal's pricing
stalemate.
The Taiwanese company's international issue will happen, observers
believe - the trick will be in bringing it at a price that will
sell while enabling the Taiwan government to save face.
The ADRs, which are central to the government's privatization
plans and Chunghwa's independence ambitions, were put on hold in
January amid disagreements on pricing between the government and
underwriters Goldman Sachs, Merrill Lynch and UBS Warburg.
Chunghwa and the government are still reeling from a disastrous
IPO last year, blamed partly on over-optimistic pricing, after the
government fixed a minimum issue price of NT$104. Less than 3% of
the company was sold to the public, compared with a target of 16%.
With stock prices falling and...
