China Development Financial Holding Corp (中華開發金控) yesterday said it had successfully met all the requirements to acquire KGI Securities Co (凱基證券) after securing 81.7 percent of KGI’s shares on the open market on the last day for the buyout.
The acquisition, which still needs the approval of both companies’ shareholders, will give the investment banking-oriented group leadership in the underwriting business, giving it a second-place position in the brokerage services industry, with 112 outlets nationwide.
For the buyout, China Development Financial had offered to trade each KGI share for 1.2 new common shares in China Development Financial and NT$5.5 in cash.
As of Friday last week, the financial group had acquired close to 60 percent of KGI shares, higher than the 50.1 percent threshold, company spokesman Eddy Chang (張立人) said.
“China Development Financial will hold a temporary shareholders’ meeting to discuss the ensuing structuring plans before the year ends,” Chang said.
Chang added that whether Grand Cathay Securities Corp (大華證券) or KGI would be the residual company would also be discussed in the meeting.
Chang said that China Development Financial would finish 100 percent acquisition of KGI before April next year.
After buying out the KGI shares, China Development Financial will have the combined advantages of KGI and Grand Cathay Securities, and take the leading position in the underwriting market, China Development Financial said in a statement.
Because capital gains from direct investments has been the main source of profits for both China Development Financial and its banking unit, China Development Industrial Bank (中華開發工銀), the addition of KGI will significantly enhance China Development Financial’s overall financial performance and make it relatively stable in the face of external market changes, the statement said.