Following China Development Industrial Bank's (
"All the directors of Grand Cathay have reached a consensus, and even promised, that they are not going to sell their shares to any outsiders in the near term," said Wang Sheng (
"I believe all [our] directors will honor their promise. We are going to disclose formally our stand [on the China Development bid] in the near term."
As to the tender offer made by China Development, originally proposed on March 22 and expected to be launched early next week, "before the last minute [of the tender offer] came, no one could ascertain its final result," Wang added.
Grand Cathay made the comments as part of a company statement posted on the TAISDAQ's Web site yesterday, stating that "the company suggests that all shareholders should take the same stand as the current directors of the board, which is to continue supporting the management of current directors."
The Grand Cathay board also announced on the Web site that "the board does not welcome China Development's tender offer on Grand Cathay's shares."
"The tender offer [by China Development] is not a simple case of manipulating share prices," said Grand Cathay president Wang. "But since the whole procedure in this case is very complicated, it's hard to describe in detail."
Wang made the comments while attending the signing of a strategic alliance between the International Bank of Taipei (台北國際商銀) and Grand Cathay.
"Regardless of the takeover bid, we will continue our cooperation with the International Bank of Taipei," said Wang.
The cooperation between Grand Cathay and the International Bank of Taipei also shows that Grand Cathay is not interested in merging with China Development. The International Bank of Taipei also controls certain portion of Grand Cathay' shares currently, but a bank executive said they are still far from merging with Grand Cathay, at least not for now.
"If the merger trend is a must in the future, we could not rule out the possibility of merging with Grand Cathay," said Yu Kuo-chih (
The Securities and Futures Commission (證期會) is going to make its ruling Monday on whether to approve China Development's tender offer.
If the commission gives its approval, China Development would launch its offer for 100 million shares of Grand Cathay at NT$20 a share in the open market immediately after the ruling.
Originally China Development offered to buy 200 million shares of Grand Cathay, but later lowered the bid to 100 million shares on Wednesday.
"The KMT obviously dislikes China Development's hostile takeover bid [on Grand Cathay], especially when China Development's executives are said to be supporters of the currently DPP administration," said Dicky Dai (戴震), a senior market commentator and former chairman of local securities and fund companies.
"The hostile takeover case has become a business confrontation between the two political parties. Since Grand Cathay has been the largest securities underwriter, there is significant business interest and political influence [in the public companies]. Whoever wins the battle, it's like winning a small scale election in the securities market," he said
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