Shares in TC Bank Ltd (大眾銀行) fell by the daily limit yesterday following panic selling after two potential buyers walked away from attempts to buy the bank.
“The company ended its interest in buying TC Bank on Thursday after concluding a due diligence review,” Yuanta Financial Holding Co (元大金控) spokesman Chuang Yu-de (莊有德) said by telephone, confirming local media reports that the deal had fallen through.
Chuang said Yuanta Financial had not entered into price negotiations with TC Bank, but declined to elaborate further.
Yuanta Financial and Fubon Financial Holding Co (富邦金控) were wooing the Greater -Kaohsiung-based lender to strengthen their provision of services in southern Taiwan through a share swap deal.
The parties reportedly could not agree on share prices and swap ratios, local media said, without naming sources.
Shares in TC Bank, in which the US private equity firm Carlyle Group holds a 36 percent stake, slumped 6.81 percent to NT$10.95 yesterday, Taiwan Stock Exchange data showed.
The lender said in a stock filing that Yuanta Financial and Fubon Financial had withdrawn from talks.
TC Bank chairman Chen Chien-ping (陳建平) said in March that several buyers had expressed an interest in buying Carlyle’s shares and the lender was seeking to improve its earnings ability to maximize the benefits of potential synergies.
Local media reported earlier that the deal would give TC Bank and Carlyle stakes of 20 percent and 7 percent respectively in Yuanta Financial, at a price of between NT$15 and NT$17 per share.
Recent falls in the share price of Yuanta Financial, Fubon Financial and TC Bank fueled rumors of share price manipulations and undermined trust, local media said.
Yuanta Polaris Securities Corp (元大寶來證券), the brokerage arm of Yuanta Financial, topped peers in selling TC Bank shares on May 18, according to stock exchange tallies.
Chuang said Yuanta Financial was exploring other options in a continued bid to expand its economies of scale.
Yuanta Financial chairman Yen Ching-chang (顏慶章) said earlier this month that the group intended to increase its number of bank branches from 88 to 100 and also expand into the life insurance market.
The company is reportedly weighing the possibility of buying Manulife Insurance Co (宏利人壽), the local unit of Canadian firm Manulife Financial Corp.
Fubon Financial remained tight-lipped on the TC Bank deal in line with its policy.
“We do not comment on acquisition activities until they bear fruit,” the company said in a stock exchange filing yesterday.