Foreign private-equity firms with majority interests in Ta Chong Bank (TC, 大眾銀行) and Entie Bank (安泰銀行) yesterday said they will hold on to their investment for a while since current evaluations make exits unfavorable.
The US Carlyle Group and Australian Longreach Group, which own 36 percent and 58 percent stakes in TC and Entie respectively, made the remarks on the sidelines of a Taipei forum on mergers and acquisitions.
“We are not in talks to offload TC shares” after negotiations with Fubon Financial Holding Co (富邦金控) and Yuanta Financial Holding Co (元大金控) fell through in May, said Alex Ying (殷尚龍), Carlyle’s Hong Kong-based managing director.
No potential buyer has approached the equity firm on the issue, either, Ying added.
Fubon Financial and Yuanta Financial reportedly offered to buy Carlyle’s stake in TC Bank through a share swap scheme at NT$15 per share.
Carlyle, the second-biggest private equity firm in the world, teamed up with Cayman Islands-based Gable Partners II LP to pay NT$17 each for 36 percent of TC common and preferred shares in July 2007, or a total of NT$21.5 billion (US$71.62 million), making it the bank’s largest shareholder.
TC shares closed down 0.64 percent at NT$9.34 yesterday, better than the TAIEX’s 1.09 percent fall, but slumping more than 20 percent since the sellout deal collapsed, Taiwan Stock Exchange data showed.
Carlyle will seek to strengthen the lender’s financial performance while waiting for the right timing to exit, Ying said.
TC Bank reported NT$715.92 million in pre-tax revenue last month, a 12.13 percent increase from the same period last year, or 7.37 percent from May.
“Sooner or later, private equities will pull out of their investments. It is just a matter of time,” Ying said.
Similarly, Longreach will focus on growing Entie’s income to make it a better acquisition target, said Lara Kwok (郭硯貽), the group’s executive director, who is based in Hong Kong.
The Australian private equity firm secured majority control of the lender for NT$23 billion, or NT$21 per share, in 2007. Longreach reportedly asked for between NT$28 and NT$30 per share because Entie posted record profits last year.
Entie Bank reported NT$911.92 million in pre-tax income last month, increasing 13.98 percent from a year earlier and 74.65 percent from May, company statistics show.
“We’re satisfied at the improvement,” Kwok said. “There is no discussion to exit the investment … but no one can tell what may happen in the future.”
Shares in Entie fell 1.57 percent to NT$12.5 yesterday, compared with a high of NT$16.5 in April.