Nov. 16 (Bloomberg) -- Taiwan’s stock exchange said it’s investigating whether Chi Mei Optoelectronics Corp. misled investors when it said it’s not in merger talks a day before announcing a takeover by Innolux Display Corp. Chi Mei, Taiwan’s second-largest maker of liquid-crystal displays, on Nov. 13 denied an Economic Daily News report that said Hon Hai Group and AU Optronics Corp. were looking to acquire the company, saying in a statement to the exchange there were no such merger plans. The following day, Hon Hai’s Innolux announced a merger between the two companies. “We need to investigate further,” Stanley Chu, a spokesman for the Taiwanese exchange, said by phone today. Denis Chen, a spokesman for Tainan, Taiwan-based Chi Mei, said he hadn’t heard of any investigation though the company would cooperate with any probe. The volume of Chi Mei stock traded on the Taiwan’s stock exchange during the two days preceding the public announcement was more than triple its three-month daily average, according to data compiled by Bloomberg. The deal, which would create the world’s third-largest maker of liquid-crystal displays, was reached on Nov. 12 after six months of talks, according to Chi Mei Chairman Frank Liao. “Since the situation last week was that we didn’t have a clear picture of the merger case, we don’t disclose this, so we denied because everything was in process,” Chi Mei’s Chen said. Chi Mei shares climbed 5 percent on Nov. 12 and 4.4 percent on Nov. 13, while Taiwan’s benchmark Taiex index was little changed on both days. The stock rose by its daily limit to NT$20.10 as of 1:12 p.m. in Taipei. Innolux climbed 0.9 percent to NT$47.40. To contact the reporter on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net.

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