Shin Kong Financial Holding Co (新光金控) yesterday announced that it would wholly acquire MasterLink Securities (元富證券), allowing it to expand its presence in the brokerage business.
Shin Kong Financial, which holds a 33.45 percent stake in Masterlink Securities, said that it would acquire the remaining outstanding shares via a share swap valued at about NT$13 billion (US$438.95 million).
The share swap ratio was set at one share of Masterlink Securities for 0.96 share of Shin Kong Financial.
That represents a premium of 18.8 percent based on Masterlink Securities’ and Shin Kong Financial’s closing price of NT$10.10 and NT$12.15 respectively on Monday.
Last year, Masterlink Securities posted a net income of NT$942 million, up 131.44 percent from a year earlier, as the stock market rallied amid a stable economy at home and abroad.
Earnings per share were NT$0.6, company data showed.
The addition of Masterlink Securities would round out Shin Kong Financial’s operations — from insurance to banking and securities investment trust and consulting, Shin Kong Financial vice chairwoman Catherine Lee (李紀珠) said.
Shin Kong Financial would continue to develop Masterlink Securities’ brand, Lee said, adding that the full-service brokerage has about 96,000 clients and ranks sixth among local peers.
As for questions about the lower-than-expected acquisition price, Masterlink Securities said that as brokerage firms’ valuations have slumped, its shareholders would benefit in the long run by gaining a stake in Shin Kong Financial.
Shin Kong Financial has seen its earnings recover this year, thanks to recognition of capital gains.
Shin Kong Financial first became an investor in Masterlink Securities in 2007 and has since held a stake of more than 25 percent.
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