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ChipMOS: Undervalued Despite Unfavorable Merger Agreement

As expected, ChipMOS finally had something to say about the share structure collapse before the Chinese New Year. On January 21, ChipMOS Bermuda (NASDAQ:IMOS) and ChipMOS Taiwan agreed to merge. The terms of the deal call for IMOS shareholders to receive US$3.71 in cash and 0.9355 ADS (American Depository Share), which represents 18.71 shares of ChipMOS Taiwan. When I initially read the terms of this deal, I felt quite disappointed. While I was skeptical about the idea of IMOS shareholders receiving a large premium, I did not expect a deal with these terms.

Currently, there are roughly 27.2 million shares outstanding of IMOS. IMOS is essentially a holding company that owns roughly 522.1 shares of ChipMOS

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