Fri, Oct 20, 2006 - Page 12 News List

Time running out for China Development's takeover

HURRY UP The Banking Bureau said that permission for the holding company to acquire Taiwan International Securities Corp runs out this week and not the year end

By Amber Chung  /  STAFF REPORTER

A financial regulator said yesterday that the permission for approval of China Development Holding Corp's (中華開發金控) takeover bid for Taiwan International Securities Corp (金鼎證券) is set to expire [tomorrow].

"Our permission runs out on Oct. 21, and not the end of this year as reported," Gary Tseng (曾國烈), director-general of the Banking Bureau, said on the sidelines of a Finance Committee question-and-answer session at the Legislative Yuan yesterday.

Under time pressure, China Development has been stepping up its share purchasing lately, in the hope of securing majority control in Taiwan International.

The amount China Development has can be translated to more than a 50 percent stake, based on Taiwan International's recent share price, Tseng said, who declined to give a figure.

The trading volumes in Taiwan Financial shares shot up to 11.92 million shares and 16.21 million shares on Tuesday and Wednesday, respectively. The volume decreased to 5.43 million shares, or about a 0.5 percent stake, yesterday, according to data from the Taiwan Stock Exchange.

As of Wednesday, China Development's holding in the brokerage had risen to 48.07 percent after it bought a further 4.61 percent stake during the previous two trading days, the company said.

The holding firm reportedly wanted to boost its shareholding to more than 50 percent in Taiwan International by the deadline. As the largest shareholder, China Development also planned to convene an ad hoc general meeting in a bid to shake-up the board and take overall control of Taiwan International.

China Development spokesperson Sherie Chiu (邱德馨) was not available for comment as of press time yesterday.

China Development launched a hostile takeover for Taiwan International earlier this year, and won four of its nine board seats at an annual shareholders meeting in May.

The hostile takeover bid has cost China Development nearly NT$10 billion (US$301 million) so far, including NT$4 billion spent on the acquisition of Global Securities Finance Corp (環華證金), in order to undermine a four-way merger organized by Taiwan International and prevent holdings dilution, sources close to the deal said.

Taiwan International once turned to Legacy Partners Group, hoping the US white knight could help head off the acquisition attempt, but to no avail.

"They wanted to obtain a 50 percent to 70 percent stake, which cannot be achieved if China Development does not offload part of its holdings," Taiwan International's public realtions officer Steve Chang (張貴智) told the Taipei Times yesterday.

And it is possible that China Development will not manage it, he said.

Chang declined to comment on any possible countermeasures, but said that they will leverage public opinion against China Development's moves.

Taiwan International accused China Development of being involved in illegal trading during the takeover investment process in a statement released yesterday, which has seriously damaged the rights and interests of the financial group's shareholders.

China Development's president Angelo Koo (辜仲瑩) is son of Jeffery Koo (辜濂松), who chairs Chinatrust Financial Holding Co (中信金控). The Koo family and Chinatrust Financial are in a shaky situation as they are under investigation concerning the company's disputed takeover attempt for Mega Financial Holding Co (兆豐金控).

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