CTBC Financial unveils Shin Kong takeover pricing, higher than Taishin

Taipei, Aug. 23 (CNA) CTBC Financial Holding Co. on Friday announced a revised plan to take over Shin Kong Financial Holding Co. and unveiled the pricing in its tender offer, which is higher than that proposed by rival Taishin Financial Holding Co.

The board of CTBC Financial held an extraordinary meeting Friday and passed a revised plan to take over Shin Kong Financial, seeking to acquire 51 percent of its smaller rival, at a price of NT$14.55 (US$0.46) per share, said CTBC Financial President and spokesperson Rachael Kao (高麗雪) at a news conference held at the Taiwan Stock Exchange that evening.

The tender offer price to obtain one share of Shin Kong Financial common stock is a combination of NT$4.09 in cash and a 0.3132 share of CTBC Financial's common stock, Kao said.

When CTBC Financial announced its takeover plan on Aug. 20, the target was to obtain 25 percent of Shin Kong Financial through the open market, with no pricing of its tender offer released at the time.

Kao said the company decided to make public more details about its planned takeover after receiving inquiries from investors, and will submit its revised plan to the regulators on Monday or Tuesday.

CTBC Financial's announcement was made after the board of Taishin Financial Holding Co. and Shin Kong Financial separately passed a proposal to merge the two firms on Thursday evening.

Taishin Financial would swap 0.6022 shares of its common stock for one Shin Kong Financial share and exchange one preferred Taishin Financial share for a preferred Shin Kong Financial share, according to the two companies' statements.

According to a market estimate, that would translate into an acquisition price of about NT$11.32 per share, which represents a roughly 9.07 percent discount on Shin Kong Financial's closing price of NT$12.45 on Thursday.

On Friday, the share price of Shin Kong Financial, the day's most traded stocks on the Taiwan stock market in terms of volume, closed unchanged at NT$12.45, while Taishin Financial shares were up 3.19 percent at NT$19.40. CTBC Financial stocks closed 1.05 percent lower at NT$33.10.

Kao said CTBC Financial is able to offer a higher price because of its ability to create synergy, citing the company's success in turning around the loss-making Taiwan Life over the past decade.

CTBC Financial believes its takeover of Shin Kong Financial would also generate better synergy, as the company would become the largest financial holding company in Taiwan, own the largest bank, and also runs the third largest life insurance company in the country.

She also appealed to the regulators for approval of CTBC Financial's takeover plan, so Shin Kong Financial shareholders can have another option before voting on the merger deal with Taishin Financial in October.

After obtaining regulatory approval, CTBC Financial's board will convene to vote on the takeover plan along with any conditions attached by the regulators, Kao said.

CTBC Financial currently owns no Shin Kong Financial shares, said Kao, when asked by a reporter during the news conference.

As of the end of the first quarter of 2024, Shin Kong Financial had NT$5.08 trillion in assets, and Taishin Financial had NT$3.2 trillion in assets, giving the combined company almost NT$8.29 trillion in assets, closing in on the NT$8.37 trillion in assets held by No. 3 CTBC Financial Holding Co.