China Development Financial Holding Corp (中華開發金控) said yesterday it had met all requirements to acquire KGI Securities Co (凱基證券) after securing nearly 60 percent of KGI shares on the open market ahead of the deadline on Monday.
The acquisition, which still needs the approval of both companies’ shareholders, will give the investment banking-oriented group leadership in the underwriting business, and second place in brokerage services with 112 outlets nationwide.
China Development Financial launched the buyout by offering to trade each KGI share for 1.2 new common shares in China Development Financial and NT$5.5 in cash.
As of yesterday, it had acquired close to 60 percent of KGI shares, higher than the 50.1 percent threshold, company spokesman Eddy Chang (張立人) said.
“The parent firm will start to reap synergy benefits this year as KGI has been profitable for the past 20 years,” Chang said.
The company will continue to buy KGI shares after the deadline on Monday under the same terms, he said. The funds used to buy all KGI shares — estimated at NT$54.63 billion (US$1.85 billion) — would generate higher returns than leaving them in certificates of deposit issued by the central bank, Chang said.
To finance the buyout, the parent firm will cut capital in its banking unit, China Development Industrial Bank (中華開發工銀), by NT$16 billion through canceling 1.6 billion shares to NT$61.6 billion.
“That will still leave us flush with capital,” Chang said.