CTBC Financial Holding Co (中信金控) yesterday said it would acquire a 35.6 percent stake in Thailand’s LH Financial Group PLC for NT$15.4 billion (US$471.02 million).
The companies have signed a legally binding memorandum of understanding following a year of negotiations, CTBC Financial said.
CTBC Financial is to acquire 7.55 billion newly issued shares through a private placement and it is to become the Thai company’s largest shareholder at about 2.2 baht per share, at a price-to-book value (PB) ratio of 1.67.
“The price of the stake acquisition is reasonable and comparable to the range of between 1.45 and 1.98 PB ratio seen in a number of acquisitions of Thai financial companies by other international players, such as Mitsubishi UFJ Financial Group’s acquisition of the Bank of Ayudhya PLC in 2013,” CTBC Financial president Daniel Wu (吳一揆) told an investors’ conference in Taipei.
There are few viable acquisition targets in Thailand, and the Thai government imposes stringent controls on the country’s financial sector, Wu said, adding that the country’s political situation did not affect its decision to buy shares in LH Financial Group.
Wu said that upon the deal’s completion and following the commencement of joint operations, LH Financial would expand the number of directors on the board from nine to 11, of which five seats are to be occupied by CTBC Financial representatives.
CTBC Financial senior vice president Rachael Kao (高麗雪) said that following the acquisition, the company’s capital adequacy ratio is expected to decline 8.8 percentage points to 133.3 percent, based on figures as of the end of December last year.
As the deal is conducted by CTBC Financial’s banking unit, CTBC Bank Co Ltd (中國信託銀行), the bank’s capital adequacy ratio is to drop by 0.35 percentage points to 10.67 percent, with Tier 1 ratio falling 0.7 percentage points to 12.28 percent, Kao said.
Wu yesterday reiterated that CTBC Financial does not have plans to raise capital. The firm last month canceled plans to raise NT$15.46 billion by issuing 920 million new shares at NT$16.8 per share.
LH Financial has a banking unit, a fund and a securities unit, and its net income last year was 1.65 billion baht (US$46.55 million).
Meanwhile, CTBC Financial yesterday acquired a NT$1.2 billion portfolio of corporate loans from ANZ Bank (Taiwan) Ltd, as part of its expansions plans focused on asset acquisition.
From India to China to the US, automakers cannot make vehicles — not that no one wants any, but because a more than US$450 billion industry for semiconductors got blindsided. How did both sides end up here? Over the past two weeks, automakers across the world have bemoaned the shortage of chips. Germany’s Audi, owned by Volkswagen AG, would delay making some of its high-end vehicles because of what chief executive officer Markus Duesmann called a “massive” shortfall in an interview with the Financial Times. The firm has furloughed more than 10,000 workers and reined in production. That is a further blow
Answering to a reported request by Germany to help address a chip shortage in its auto industry, the Ministry of Economic Affairs (MOEA) yesterday said that it was in talks with domestic chip suppliers. Foreign media over the weekend reported that German Minister of Economic Affairs Peter Altmaier had sent a request to Taipei to ask Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to cooperate more closely with German automakers to provide microchips and sensors, to bridge a shortage that has emerged over the past few months. The MOEA said that it had not yet received the request and could therefore not elaborate
FOCUS ON FOUNDRIES: An analyst said that some investors would be disappointed because they were expecting a larger announcement of a partnership with TSMC Intel Corp’s incoming chief executive officer Pat Gelsinger on Thursday pledged to regain the company’s lead in chip manufacturing, countering growing calls from some investors to shed that part of its business. “I am confident that the majority of our 2023 products will be manufactured internally,” Gelsinger said. “At the same time, given the breadth of our portfolio, it’s likely that we will expand our use of external foundries for certain technologies and products.” He plans to provide more details after officially taking over the CEO role on Feb. 15, but Gelsinger was clear that Intel is sticking with its once mighty
AWARENESS NEEDED: The central bank urged lenders to know their customers before undertaking business for them and to seek funding in conventional ways The central bank yesterday said that it would take action against four foreign lenders for their involvement in helping companies trade in the deliverable forward market in contravention of foreign-exchange regulations. Some grain merchants newly based in Taiwan have since July 2019 been practicing questionable currency-trading activity, with the help of branches and subsidiaries of six foreign banks, the monetary policymaker told an unscheduled news conference. Affiliated firms as of July last year completed currency-related deals they referred to as trading that totaled US$11 billion, which was not in sync with their real business needs, the central bank said after wrapping up
RSS