Taishin Financial Holdings Co (台新金控), seeking to increase its stake in Chang Hwa Commercial Bank (彰化銀行), said it will sell NT$27 billion (US$844 million) of securities to Newbridge Asia IV, L.P. in a private placement.
The Newbridge Capital LLC fund will buy NT$20 billion of stocks and NT$7 billion of convertible bonds from Taipei-based Taishin, the two companies agreed, according to a Taishin statement to the Taiwan Stock Exchange filed around midnight on Friday.
The government is promoting mergers among the nation's almost 50 banks so they can withstand competition in the US$700 billion market from Citigroup Inc, HSBC Holdings Plc and other global lenders. President Chen Shui-bian (
"The deal shows Taiwan's better banks are attractive to foreign investors," said Michael On, who manages the equivalent of US$60 million at Beyond Asset Management Co in Taipei.
"There won't be any synergy" between Taishin and Newbridge, he said.
Newbridge, which is based in San Francisco, was established in 1994 by Texas Pacific and Blum Capital Partners, has invested in companies including Shenzhen Development Bank, Lenovo Group Ltd (聯想), Hanarotelecom Inc and Korea First Bank. Taishin owns Taiwan's second-biggest credit-card issuer.
The purchase will make Newbridge the single largest institutional investor in Taishin, with an 18 percent stake, the Commercial Times reported yesterday.
"We're inclined to bring in foreign investors in the private placement," Carol Lai (賴昭吟), Taishin's chief financial officer, said on Dec. 16. The company's board on the same day approved a plan to raise as much as NT$35 billion selling stock in a private placement.
Shares of Taishin gained 2.2 percent to NT$18.30 on Jan. 25, the last trading day before the Lunar New Year holiday. The stock is 26 percent lower than a year ago, compared with an 11 percent rise in the TAIEX index.
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