Chang Hwa Commercial Bank (彰銀) is expected to hold a board meeting on Friday to finalize the proposed share swap ratio of 1:1.3 with the state-run bank's second-largest shareholder Taishin Financial Holding Co (台新金控), which has a 22 percent stake.
But top executives at Chang Hwa remained unimpressed with the latest ratio -- one share of Chang Hwa for 1.3 shares of Taishin -- which is already higher than the previously proposed ratio of 1.2 shares, local media reported yesterday.
"I don't think it is too much to ask that the [swap share] ratio be increased to 1:1.5," an unnamed Chang Hwa bank official was quoted by the Liberty Times (the Taipei Times' sister newspaper) as saying yesterday.
The banker said that such a ratio would provide no premium on the share-swap deal.
Chang Hwa shares yesterday dropped NT$0.5, or 2.8 percent, to close at NT$17.4 per share, while shares of Taishin Financial dropped NT$0.55, or 4 percent, to close at NT$13.
To appease Chang Hwa, Taishin Financial Lin Keh-hsiao (
He said that the 1:1.3 ratio -- approved by Taishin Financial's board on Dec. 28 -- was a well-thought out and fair one and called on the state-run bank to "sit down and talk some more" about the deal.
Lin said that if the bank failed to accept its offer or came up with a compromised one Friday, the merger deal could be forced to "take a break" after Chang Hwa's biggest shareholder, the Ministry of Finance, said it would wait for an evaluation by its financial consultant.
Lin said that Taishin Financial had paid a 9.5 percent premium two years ago for 22 percent of Chang Hwa shares, whose prices were 23 percent to 30 percent lower than shares of Hua Nan Financial Holdings Co (
However, Chang Hwa shares jumped afterwards to a level similar to Hua Nan's, which Taishin Financial had helped accomplish, Lin said.
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