Longreach Group, the buyout firm founded by former UBS AG investment banker Mark Chiba, will pay NT$800 million ($26 million) to raise its stake in EnTie Commercial Bank (安泰銀行) by 3 percent. EnTie shares rose by the daily limit.
Longreach will pay NT$8 apiece for 100 million shares, it said in a front-page advertisement in the Chinese-language Commercial Times and the Economic Daily News yesterday. That’s 28 percent higher than the closing price of EnTie shares yesterday, when the stock rose 6.8 percent, the most since April 7, to NT$6.25.
“Longreach may benefit from rising fee income after Taiwan relaxes travel and investment restrictions on Chinese residents,” said Eric Yao, who helps manage US$152 million in funds at Truswell Securities Investment Trust Co (富鼎投信). “Increasing its stake in existing banks is easier than Longreach setting up new branches.”
Longreach is EnTie’s biggest shareholder with a 61 percent stake, the buyout firm said in an e-mailed statement yesterday.
EnTie posted a NT$933 million (US$30 million) loss in the first quarter after reporting two consecutive losses in the past two years as credit card defaults mounted.
Separately, Longreach and Carlyle Group are competing to buy a stake in Chinfon Bank (慶豐銀行) to expand their business in Taiwan, the Apple Daily reported yesterday, without saying where it got the information.