Despite an endorsement from its shareholders yesterday, Waterland Financial Holdings Co (國票金控) faces an uphill battle to close its planned acquisition of MetLife Taiwan Insurance Co (大都會人壽) for US$112.5 million, board supervisors and shareholders said yesterday.
“Many of this acquisitions details remain dubious, even fraudulent,” company supervisor Wang Tzu-chiang (王子鏘) told a shareholders’ meeting yesterday that had a 67.47 percent turnout rate.
Wang called the deal loss-making and over-priced since Metlife Taiwan, the local operations of US life insurer MetLife Inc, hasn’t set aside enough reserves to address its policy liability of NT$30.9 billion (US$960 million).
He joined another supervisor to urge Waterland Financial to immediately launch another review before reaching a conclusion.
Both supervisors and three board members, who represent Nice Group (耐斯集團), a shareholder with a 7 percent stake in Waterland Financial, remain strong opponents of the deal.
To close the deal, the next biggest hurdle will be regulatory approval from the Financial Supervisory Commission’s insurance bureau, which a company source said will never arrive.
“[We were tipped off that] head of the insurance bureau Huang Tien-mu [黃天牧] told the commission chairman that the commission will end up having to pay numerous visits to the Special Investigation Division [should a regulatory approval be granted],” he said.
Staffers at the insurance bureau office, however, denied such comments.
Waterland board director James Wei (魏憶龍) said the 90.52 percent approval vote to endorse the acquisition at yesterday’s meeting ineffective since shareholders were not fully informed of the deal’s evaluation.
Several shareholders, whose motions to call off the vote were ignored, threatened to file lawsuits against the management and those shareholders giving consent to the acquisition.
Analysts had warned earlier that the acquisition could put Waterland under greater capital pressure and earnings volatility.
However, Waterland chairman Steven Hung (洪三雄), who represents Hotel Taipei Miramar (美麗華飯店) with a 27 percent stake in the financial holding firm, reiterated that the acquisition would be worthwhile, giving an extra boost of NT$80 billion to the company’s assets, currently NT$180 billion.
In related news, Fubon Financial Holding Co (富邦金控) yesterday approved a NT$35 billion fundraising plan at its shareholders’ meeting. The company also decided to give out a cash dividend of NT$2 per share and stock dividend of NT$0.5 per share.
Waterland shares ended 0.1 percent lower at NT$9.7 yesterday on the Taiwan Stock Exchange. The stock has declined 6.73 percent so far this year, compared with a fall of 8.71 percent on the benchmark TAIEX over the same period.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to