Shares of Taiwan Cement Corp (TCC) moved lower on Wednesday after Chia Hsin Cement Corp rejected a deal in which TCC would have acquired all of TCC International Holdings Ltd's outstanding shares, dealers said. TCC owns a majority stake in TCC International Holdings Ltd.

Currently, Chia Hsin Cement holds a 15.8 per cent stake in Hong Kong-listed TCC International Holdings and the rejection of the acquisition deal could hamper TCC's efforts to fully bring the unit under its corporate umbrella. Shares of TCC fell 1.71 per cent on Wednesday to close at TWD46.00 (US$1.53) with 11.82m shares changing hands.

In November, TCC announced that wholly owned subsidiary TCC International Ltd would launch a voluntary cash offer to acquire all outstanding shares in TCC International Holdings for HKD3.9 per share.

Before the tender offer is due 20 May, Chia Hsin Cement said it has rejected the offer and wants to keep its stake in TCC International Ltd. The rejection came after a board meeting of Chia Hsin Cement was not happy with the acquisition price, saying that TCC International Holdings shares have been undervalued.

In addition, as TCC International Holdings, which runs a broad production base in China, has benefited from solid demand from the China market, the stake in the company is expected to continue to give a boost to Chia Hsin Cement's bottom line.

In the first half of last year, TCC International Holdings posted earnings of HKD577m (US$74.4m), sharply up from HKD269m a year earlier in reflection of product price hikes in China due to strong demand.

Chia Hsin Cement said that the company will continue to ride the wave of rising demand in China as it has a stake in TCC International Holdings.