CTBC Financial Holding Co (中信金控) is to acquire Taiwan Life Insurance Co (台灣人壽保險) with a premium of nearly 20 percent, as the two sides are set to make the deal public later this month, local media reported yesterday.
Several newspapers reported that CTBC and the major shareholders of Taiwan Life reached a consensus on the stock exchange ratio, with negotiations for the deal set to close on Tuesday.
“The firms have agreed to a deal to allow each Taiwan Life share to be exchanged for 1.44 CTBC shares,” a report by the Chinese-language Commercial Times said.
This would be the second time CTBC has offered a price to acquire Taiwan Life and the latest deal appears to be more favorable to Taiwan Life.
Last year, Taiwan Life shareholders turned down an acquisition proposal by CTBC, which also offered each Taiwan Life share in exchange for 1.44 CTBC shares.
CTBC shares closed at NT$23.9 on the local bourse on Thursday, compared with CTBC’s share price of NT$19.9 last year at the time it first offered to acquire Taiwan Life. The latest offer could boost the deal to NT$34.6 billion (US$1.13 billion), an increase of NT$8 billion from the previous offer.
The Chinese-language Economic Daily News reported that during the negotiations earlier this week, Long Bon International Co (龍邦國際) — Taiwan Life’s biggest shareholder — insisted on a better price, saying that the life insurer has seen total assets increase NT$58.6 billion from the end of 2013.
Taiwan Life posted net income of NT$1.81 billion last year, up from NT$480 million in 2013, statistics showed.
The two firms are to hold a board meeting on May 12 and present the deal to a Taiwan Life shareholders next month for discussion and a final decision.
In a filing to the Taiwan Stock Exchange yesterday, CTBC said the firm had “no comment” on local media reports about the deal.
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