CTBC Financial Holding Co’s (中信金控) talks to acquire Tokyo Star Bank for about ￥50 billion (US$498 million) have stalled amid a disagreement over the price, three people with knowledge of the matter said.
Shareholders of closely held Tokyo Star Bank, including Dallas-based Lone Star Funds, Shinsei Bank and Aozora Bank — have rejected the offer from Taipei-based CTBC, said the people, who asked not to be identified because the deliberations are private.
An acquisition of Tokyo Star Bank by CTBC would mark the first takeover of a Japanese commercial bank by a foreign lender. Lone Star, the fund run by John Grayken, initially bought the predecessor of Tokyo Star Bank in 2001 for ￥40 billion, about two years after the lender was bailed out by the government.
CTBC started discussions with Tokyo Star Bank’s owners late last year, one of the people said. At ￥50 billion, the deal would be the largest inbound investment in Japan’s banking industry since 2009, data compiled by Bloomberg showed. Tokyo Star Bank posted a 68 percent gain in profit to ￥4.5 billion for the year ended March 31, in part because of lower bad-loan costs.
Spokespeople for CTBC, Lone Star, Shinsei Bank and Aozora Bank declined to comment on the discussions.
Chika Yamazaki, a spokeswoman for Tokyo Star Bank, said the bank was not a position to comment on the matter.
Tokyo Star Bank’s rising profit, combined with the surging shares of rival lenders, bolstered shareholders’ expectations of a higher price, two of the people said.
Lone Star agreed to sell Tokyo Star Bank to Japanese buyout firm Advantage Partners LLC in December 2007, and less than four years later took control of the lender again together with Shinsei and Aozora.
Tokyo Star Bank was delisted from the Tokyo Stock Exchange in 2008 after the acquisition by Advantage. The lender had ￥1.53 trillion of loans outstanding as of March 31, with 31 branches and 1,256 employees, according to the company’s Web site.