Cathay Financial Holding Corp (國泰金控), Taiwan's largest financial-service provider, yesterday confirmed that it has been approached by Deloitte and Touche Taiwan in response to the interest the financial holdings company has expressed in Chang Hwa Commercial Bank's (彰化銀行) issuance of new shares.
Cathay nonetheless remained tight-lipped yesterday about what it intends to do. The company said there is still too much uncertainty about the share offer to make a definite evaluation.
Deloitte and Touche Taiwan is the financial advisor to Chang Hwa, the nation's sixth-largest lender, in its issuance of 1.4 billion new shares, representing a stake of 22 percent in the state-run bank.
"They did brief us on Tuesday about Chang Hwa's plan to issue new shares," Cathay's chief strategic officer Lee Chang-ken (李長庚) said in a phone interview yesterday.
Cathay prefers to acquire common shares, which would give it a say in the bank's management, but the bank has not made clear whether the new shares will be common or special stock, Lee said.
It is also uncertain what will happen to Chang Hwa's government-controlled board seats after the sale of new shares, the executive said.
"The game rules are not clear enough for us to make a further evaluation on the feasibility of participating for the time being," Lee said.
On Wednesday, Cathay Financial paid NT$1.59 billion (US$50.8 million) for a 31 percent stake in smaller lender Lucky Bank (
Cathay's banking arm, Cathay United Bank (
Lee shied away from questions about whether the company is interested in buying stakes in other state-run financial institutions, such as First Financial Holding Co (
Cathay chairman Tsai Hong-tu (
Following Chang Hwa's failure to bring in foreign strategic investors through a global depositary receipt (GDR) issuance, the bank announced last month that it would sell new shares to local buyers, so as to help meet the government's goal of halving the number of state-run banks by the end of the year.
"We will endeavor to finalize the share sale by the year's end as scheduled," Chang Hwa spokesman Hsieh Chao-nan (謝昭南) said.
Chang Hwa has not decided whether to sell shares in a private buy-out or through public issuance, although a private buy-out might be more profitable, since the sale price is expected to be higher than the market price of NT$18 per share, Hsieh said.
Interested buyers would have to pay more than NT$25 billion to acquire the 1.4 billion new shares, as Chang Hwa shares were unchanged at NT$17.90 on the Taiwan Stock Exchange yesterday.
Deloitte and Touche Taiwan yesterday declined to say which buyers have expressed an interest in the Chang Hwa shares, citing a confidentiality agreement.
According to reports in the Chinese-language media, Deloitte and Touche has engaged in talks with Chinatrust Financial Holding Co (
"We don't comment on single cases after they come to a certain stage," Chinatrust Financial's spokesman Lin Shiaw-pin (
RSS