Taishin raises offer for Shin Kong in what could be Taiwan's biggest financial deal

CTBC Financial Holding Co

12/09/2024 05:17

* 
      Taishin lifts offer price by 25% to about $7 bln
    

        * 
      Taishin plans to absorb 100% stake in Shin Kong via stock
swap
    

        * 
      Rival offer from CTBC is for a 51% stake through mix of
cash and
shares
    

  
    By Faith Hung
       TAIPEI, Sept 12 (Reuters) - Taiwan financial
conglomerate Taishin  2887.TW  said it would raise its offer for
peer Shin Kong  2888.TW  by 25% to about T$222.4 billion ($7
billion), in a deal that would be Taiwan's biggest-ever
financial services industry merger.
    Taishin and Shin Kong's long-mooted tie-up, announced last
month, has had to contend with an unexpected rival bid from CTBC
Financial  2891.TW  to acquire Shin Kong, though the target says
it views Taishin as its preferred bidder.
    Taiwan's financial services industry tends to be quite
domestically focused, and Taishin and Shin Kong hope that by
merging they can expand their footprint and become a more
globally competitive firm while building long-term value.
    Taishin will offer 0.672 common shares and 0.175 preferred
shares per Shin Kong share for a 100% stake in the revised
all-share deal, sweetening the pot from the 0.6022 common share
swap offered previously, Taishin and Shin Kong said late on
Wednesday.
    The offer would convert to T$14.18 per Shin Kong share based
on Wednesday's closing prices, 25% more than was originally
offered, Taishin said, although slightly less than the T$14.55
per share offered by CTBC for a 51% stake through a mix of
shares and cash.   
    "Our offer applies to 100% of Shin Kong shareholders, while
CTBC's offer is for only 51% of shares. What price would the
remaining 49% of shareholders be able to get from CTBC (or the
market) for their shares?" Taishin President Welch Lin told
reporters. "That's a major uncertainty."  
    A merger between Taishin and Shin Kong would make it the
island's fourth-largest financial firm, with estimated combined
assets of about T$8.3 trillion.
    CTBC declined to comment on Taishin's raised offer.
    Gaining control of Shin Kong would make CTBC Taiwan's
largest financial firm with estimated combined assets of T$13.46
trillion, slightly above the T$13.27 trillion held by Cathay
Financial  2882.TW . 
    Taishin shares fell 1.9% on Thursday morning, while Shin
Kong was down 1.1%, underperforming a 3% rise in the broader
index  .TWII . CTBC was trading 0.6% lower.  

 (Reporting by Faith Hung; Editing by Ben Blanchard and Jamie
Freed)
 ((faith.hung@thomsonreuters.com;))