Wed, Nov 26, 2003 - Page 11 News List

Stock prices boosted by speculation over mergers

RUMORS Although nothing has been finalized yet, the possible mergers being considered between several financial companies have impressed investors

By Joyce Huang  /  STAFF REPORTER

Stock investors yesterday respon-ded positively to continuing speculation about possible mergers and acquisitions by some of the nation's financial holding companies.

Fubon Financial Holding Co (富邦金控) closed NT$0.1 higher at NT$32.3 and Chinatrust Financial Holding Co (中信金控) rose NT$1.4 to end at NT$34.5, following news that either Fubon or Chinatrust might acquire their smaller rival SinoPac Holdings Co (建華金控) in the near future. SinoPac edged up NT$0.5 to close at NT$18.8.

"SinoPac is on the right track to stress the importance of management integration, not just the [selling] prices, when it comes to merger and acquisition talks," said William Fong (方偉昌), an analyst at Primasia Securities Co, adding that both Fubon and Chinatrust are good choices for SinoPac.

Fong made the comment after a Chinese-language newspaper reported that SinoPac had apparently terminated its merger talks with Cathay Financial Holding Co (國泰金控), the nation's biggest financial holding company.

SinoPac could make its final decision between Fubon and Chinatrust within a week, a Chinese-language newspaper reported, without saying where it got the information. SinoPac denied this report.

"No conclusions have yet been reached," SinoPac spokesman Kevin Peng (彭康雄) told the Taipei Times yesterday, saying the company is cautiously ready to merge.

"Since our goal is to reach a merger decision by the first quarter next year, there's no need to rush now," Peng said.

Investors yesterday also respon-ded positively to speculation that a merger deal between First Financial Holding Co (第一金控) and Taishin Financial Holdings Co (台新金控) is under way.

Taishin closed NT$1.00 higher at 25.90 and First Financial stayed at NT$22.70.

"If First Financial acquires Taishin, whose consumer banking business currently takes up a 2.6 percent market share, Taishi should be able to take advantage of First Financial's client and meet its goal of achieving a 5 percent market share in consumer banking businesses," Fong said.

He said he nonetheless believes that Taishin is more likely to resume merger talks with Shin Kong Financial Holdings Co (新光金控), as both companies are controlled by the Shin Kong Group.

Both Taishin and First Financial denied media speculation yester-day. Taishin senior vice president Daniel Tsai (蔡孟峰) told reporters that Taishin "may only take on merger and acquisition activities in two or three years."

In a statement it issued to the Taiwan Stock Exchange, First Financial said that the media reports are not "mature facts."

"The company is still exploring all kinds of possibilities in mergers and acquisitions. No merger deal is slated to be discussed at the board of directors meeting at the end of November or in mid-December," the statement read.

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