UK-based Standard Chartered has plans to make a US$400 million bid for Chinfon (
According to the report, the British bank in the past two weeks had been given the greenlight to make a bid by the Ministry of Finance (
A bid is likely early next year, the report said.
Standard Chartered, which is being advised by investment house Warburg Dillon Read, is expected to bid for a 75 percent stake in Chinfon and is also likely to ask for an option to increase the stake to roughly 90 percent, the newspaper said.
The remaining stake is likely to be owned by the government.
In addition, the bank is asking that it be granted preferred bidder status.
The proposed buyout comes as the government plans to deregulate the banking industry, the Sunday Telegraph said, as laws that will enable foreign investors to own a majority stake in Taiwanese banks are expected to be passed soon.
But after the report was released yesterday, a Standard Chartered spokesman told Reuters in London it had no immediate plans to acquire Chinfon.
"We never comment on rumors, but there is no announcement planned imminently about an acquisition in Taiwan," the spokesman said.
"The Taiwanese government does not allow non-Taiwanese companies to take more than a 15 percent stake in a company and our policy is to take over banks in which we are able to get a controlling interest," he said.
"We have not heard of any plans to relax those rules."
In the newspaper report, the unidentified sources said Standard Chartered was likely to face competition from ABN AMRO and CBC of Singapore.
Chinfon's life insurance business earlier this year was sold to Prudential, the UK's biggest life insurer.
Standard Chartered and Prudential have agreed to sell life insurance products in Asia, and there has been speculation the two have worked together on their Chinfon bids, the newspaper reported.
Standard Chartered presently has two Taiwan branches, which employ 647, according to the report.
It recently bought a 75 percent stake in Nakornthon, a Thai bank.
In related news, assets of offshore banking units of banks operating in Taiwan at the end of November reached US$43.155 billion, up 4.04 percent from a year earlier, a statement released by the Central Bank of China said yesterday.
The statement said domestic banks accounted for 67 percent of total offshore banking unit assets, and foreign banks operating in Taiwan accounted for the remaining 33 percent.
At the end of November, Taiwan had 38 domestic banks and 32 foreign banks.
The statement said deposits represented 72 percent of the OBUs' total liabilities, while interbank lending accounted for 48 percent of the OBUs' total assets.
Asia was OBUs' largest lender and borrower, the statement said.
Options contracts conducted by the OBUs in November totaled US$758 million, margin lending US$226 million, financial futures US$18 million, interest rate swaps US$14 million and foreign exchange/interest rate swaps US$10 million, the statement added.
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