The board of SinoPac Securities Co (永豐金證券), the nation’s fifth-largest brokerage by market share, yesterday approved plans to acquire Pacific Securities Co (太平洋證券) for NT$3.69 billion (US$123.1 million) in cash to boost its economies of scale and overall earnings.
The buyout offer translates into NT$12.65 per share and a price to net worth ratio of 107 percent, SinoPac Securities said.
The acquisition still needs approval from respective shareholders and financial regulators.
SinoPac Securities, the -surviving entity, would increase its number of outlets nationwide from 49 to 59 following the integration, tentatively set for Nov. 12.
Established in 1988, Pacific Securities has paid-in capital of NT$2.92 billion and 400 employees.
The purchase of Pacific Securities would raise SinoPac Securities’ market share to 5.479 percent from 4.97 percent, behind Yuanta Polaris Securities Co (元大寶來證券), KGI Securities Co (凱基證券) and Capital Securities Corp (群益證券).
SinoPac Financial Holdings Co (永豐金控) spokesman Michael Chang (張晉源) said the brokerage aims to boost its ranking to the top three with a market share of more than 6.5 percent.
There are 86 securities houses with 1,200 outlets in Taiwan and about 30 of them have a market share of less than 1 percent. The sector is under pressure this year amid shrinking stock trading volume, as Europe’s debt problems and the plan to tax capital gains on securities transactions sideline investors and small brokerages are opting to exit the market.
SinoPac Securities’ announcement came three days after Yuanta Polaris Securities said it was purchasing Ding Fu Securities Co (鼎富證券).