Sat, Oct 14, 2006 - Page 12 News List

Citibank, Bank of Overseas Chinese fail to reach deal

By Amber Chung  /  STAFF REPORTER

The long rumored investment talks between Citibank and the Bank of Overseas Chinese (華僑銀行) may continue to drag on as Citibank failed to make an offer before yesterday's deadline, a company executive said yesterday.

"Yes, it was the deadline but they had not made any offer by the time due today," Peter Huang (黃古彬), vice chairman of parent Polaris Securities Co (寶來證券), told the Taipei Times in a telephone interview.

Polaris holds about a 40 percent stake in Bank of Overseas Chinese.

The process could carry on next week, but if Citibank could offer a price that "is not far off," a deal could be struck very soon, Huang said.

The executive, however, shied away from elaborating on the bank's preferred price.

Citibank continued to decline to comment on the potential deal.

Local newspapers reported that the talks between the two parties were drawing to an end and yesterday was the deadline for Citibank to make an exclusive offer.

Polaris reportedly favored a floor price of NT$12 per share.

Bank of Overseas Chinese shares closed almost 7 percent limit-up at NT$12 on the Gretai Securities Market yesterday.

Yesterday marked the second extension as the bank extended the first deadline -- last Wednesday -- in the hope of getting a better price after Standard Chartered Bank announced its outright acquisition of Hsinchu International Bank (新竹商銀) on Sept. 29 with a premium exceeding 30 percent.

The acquisition will boost the number of Standard Chartered outlets to 86 nationwide from three.

Standard Chartered's move was expected to add momentum to Citibank's and HSBC Ltd's acquisition plans in Taiwan in the near future, Edward King (金愷), co-head of Asia Pacific M&A [Merger and Acquisition] with Morgan Stanley, said in an investment forum in Taipei on Thursday.

Citigroup Inc CEO Charles Prince said earlier this month that he would seek to boost the bank's overseas earnings to 60 percent from 45 percent in the next few years through acquisition of rivals in markets like Taiwan, Turkey and China.

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