SinoPac Financial to acquire King's Town Bank for almost NT$60 billion

Taipei, Dec. 28 (CNA) SinoPac Financial Holding Co. has agreed to acquire King's Town Bank in a cash-stock swap deal for almost NT$60 billion (US$1.83 billion) to take the bank completely under its corporate umbrella.

SinoPac Financial and King's Town Bank held their individual board meetings on Friday to approve the acquisition deal in which the financial holding firm will use NT$26.75 in cash and 1.15 common shares to buy one King's Town Bank share, with the acquisition value to hit NT$59.9 billion. Cash will account for 50 percent of the total acquisition.

Both sides have scheduled their own special general meetings for March 3, 2025 to secure approval from their shareholders before seeking regulatory approval in a bid to kick off the acquisition process.

Speaking with reporters, SinoPac Financial President Stanley Chu (朱士廷) said the acquisition price translated into NT$53.89 per share and represented an almost 8.8 percent premium over King's Town Bank's closing price of NT$49.55 on Friday on the Taiwan Stock Exchange.

Chu said SinoPac Financial and King's Town Bank are complementary to each other as the financial holding firm's branches and offices are largely located in northern Taiwan and the bank has a strong showing in the south.

He said after the acquisition, Bank SinoPac is expected to have 191 branches around Taiwan.

King's Town Bank owns 66 branches in Taiwan, including 43 in the Yunlin-Chiayi-Tainan areas and five in Kaohsiung, southern Taiwan, while most of Bank SinoPac's 125 branches are located in northern Taiwan.

With an acquisition expected to affect employees of King's Town Bank, Chu said SinoPac Financial will try its best to retain the bank's workers and a three-year program to keep the bank's employees will also cover the bank's securities subsidiary.

Kerry Hsu (許如玫), chief financial officer of SinoPac Financial, said her company will issue new shares to finance the acquisition deal, adding the new shares could dilute its earnings by 9.15 percent but the financial impact will be limited.

Hsu said King's Town Bank's profit in the first nine months of this year represented almost 20 percent of SinoPac Financial so having the bank under its corporate umbrella is expected to boost the financial holding firm's bottom line and shareholder value.

Hsu said the acquisition deal is scheduled to be completed in the fourth quarter of next year at the earliest, and with the deal done, SinoPac Financial aims to integrate Bank SinoPac with King's Town Bank's two subsidiaries in one year.

According to data compiled by the Financial Supervisory Commission, after the acquisition, SinoPac Financial's total assets are expected to increase to NT$3.1 trillion to become the 12th largest financial holding firm in Taiwan, up from the current 13th.

SinoPac Financial said it expects it will take the ninth spot in lending extended to small and medium sized enterprises in Taiwan after the acquisition, up from 11th place, while the size of its net profit could become the seventh largest, up three notches from its current place.

King's Town Bank said with the presence of SinoPac Financial, the bank's existing customers are expected to enjoy a comprehensive range of financial products and services.