Shares of financial and insurance companies rose yesterday, fueled by reports of mergers and acquisitions (M&A), although the companies mentioned in the reports dismissed such talk as media speculation.
Ta Chong Bank Ltd (大眾銀行), a Taiwanese lender controlled by Carlyle Group LP, advanced 2.13 percent to close at NT$12 ahead of a board meeting on Thursday.
The meeting is expected to approve plans by the US private equity firms to sell its 36 percent stake in the Greater Kaohsiung-based lender, although Ta Chong said the issue is not on the agenda.
The Carlyle Group, which teamed up with Cayman Islands-based Gable Partners II LP to pay NT$17 per share for Ta Chong in July 2007, is looking to divest the five-year investment in line with standard practice.
Ta Chong’s shares have jumped 69.97 percent this year amid reports Yuanta Financial Holding Co (元大金控) offered to buy the bank for US$1.25 billion through a share-swap deal.
The deal would give Ta Chong a 20 percent stake in Yuanta Financial at a price of between NT$15 and NT$17 per share, foreign and local media said, adding that the deal would secure Carlyle Group a 7 percent stake in Yuanta -Financial and a board seat.
Yuanta Financial chairman Yen Ching-chang (顏慶章) said earlier this month that the group was interested in expanding its banking unit after merging Polaris Securities Co (寶來證券).
“Yuanta Financial would like to increase its number of bank branches and expand into the life insurance business, but there is no timetable for that expansion,” Yen said on May 11.
The ideal number of branches for Yuanta Bank (元大銀行) would be about 100, from its current 88, Yen said.
Ta Chong topped the buy list of local shares among foreign investors last week, with net positions increasing by 24.72 million shares, followed by Taiwan Mobile Co (台灣大哥大) by 18.28 million shares and China Life Insurance Co (中國人壽) by 10.76 million shares, Taiwan Stock Exchange data showed yesterday.
Meanwhile, Taishin Financial Holding Co (台新金控) saw its shares gain 1.83 percent to close at NT$11.15 yesterday amid reports the company is about to conclude a deal to buy the local unit of New York Life Insurance Co.
Taishin Financial said yesterday it had not ruled out the possibility of buying a life insurance unit and would make a public announcement when the time was right. The firm is reportedly in the process of negotiating with New York Life Taiwan over the latter’s value, which had NT$77.41 billion (US$2.63 billion) in assets as of the end of last year and a net worth of NT$3.99 billion, company data showed.
Canadian firm Manulife Financial Corp is reportedly in talks to sell its local unit, Manulife Insurance Co (宏利人壽), with the operational environment increasingly difficult for foreign players.
Following the financial crisis of 2008, foreign life insurers are required to adhere to stricter international capital requirements, but allowed less flexibility in allocating their assets than local companies, Allianz Taiwan Life Insurance Co bancassurance vice president Bright Chang (張敏亮) said last week.
Chang refused to comment on HSBC’s plans to sell its life insurance business in Taiwan to Allianz.
“Acquisitions normally stem from a need to expand sales channels, market share and asset size,” Chang said.
Allianz Taiwan would not benefit in the first two areas by acquiring HSBC’s insurance business, he added.