Taiwan Cement Corp (台灣水泥), the nation’s largest cement maker, yesterday announced a proposal to privatize its TCC International Holdings Ltd (TCCI, 台泥國際集團) subsidiary and delist it from the Hong Kong Stock Exchange.
TCCI, which was incorporated in the Cayman Islands in line with the nation’s China-bound investment restrictions, has cement operations in several southern Chinese provinces.
If the proposal is completed, TCCI would become a fully owned unit of Taiwan Cement, TCCI managing director Jason Koo (辜公怡) told a news conference in Taipei.
Koo is a nephew of former Taiwan Cement chairman Leslie Koo (辜成允), who died from severe head injuries he sustained in a fall in January.
Taiwan Cement is the largest shareholder of TCCI, owning 63.05 percent of the firm’s issued shares, while local peer Chia Hsin Cement Corp (嘉新水泥) has a 9.7 percent stake.
Taiwan Cement said it offered to buy the 36.95 percent of shares at HK$3.6 per common share, a 38.5 percent premium over TCCI’s closing price of HK$2.6 on the Hong Kong Stock Exchange on Tuesday.
It also offered to swap shares with TCCI shareholders at a ratio of 0.42 Taiwan Cement shares per TCCI common share.
The acquisition plan requires approval by the Investment Commission and the Financial Supervisory Commission, Taiwan Cement said.
Capital Securities Corp (群益證券) said in a client note that the potential acquisition is expected to catalyze Taiwan Cement’s earnings and long-term operations.
If TCCI is completely privatized, it would provide an estimated additional earnings per share of NT$0.22 to Taiwan Cement in the second half of this year, Capital Securities said.
Taiwan Cement reported earnings per share of NT$1.72 for last year, up from NT$1.56 the previous year.