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Far Eastern Bank's share price soars on takeover rumor

Shares of Far Eastern Interna-tional Bank (遠東商銀) surged by the daily limit after a news report said it may sell a 51 percent stake to ABN Amro Holding NV, the Netherlands' largest lender.

The stock opened limit up yesterday and closed at NT$19.40 on the Taiwan Stock Exchange after the Chinese-language Commercial Times said ABN Amro may buy 51 percent of Far Eastern Bank for NT$25 a share for a total of NT$26.4 billion (approximately US$800 million).

The offer of NT$25 a share represents a 37 percent premium. Both parties were close to signing an agreement, the newspaper said, without citing a source.

``We don't comment on market rumors,'' Edward Lee, a Taipei-based spokesman at ABN Amro, said.

Taipei-based Far Eastern has 35 branches in Taiwan. The market has been speculating that the local lender would form a strategic alliance with or sell a stake to foreign investors such as Shinsei Bank of Japan or British banking giant HSBC Holding Plc.

The bank yesterday denied the rumor about a partnership with ABN Amro.

"We plan to form strategic alliances with international financial companies but no agreement has been reached so far," Far Eastern said in a filing to the Taiwan Stock Exchange, without saying who the potential partners could be.

The Chinese-language Econ-omic Daily News reported in November that Far Eastern might sell a 60 percent stake to HSBC within a year in three phases, after Far Eastern chairman Douglas Hsu (徐旭東) said in October that the lender might be willing to sell a majority stake for the right price.
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