Despite an endorsement from its shareholders yesterday, Waterland Financial Holdings Co (國票金控) faces an uphill battle to close its planned acquisition of MetLife Taiwan Insurance Co (大都會人壽) for US$112.5 million, board supervisors and shareholders said yesterday.
“Many of this acquisitions details remain dubious, even fraudulent,” company supervisor Wang Tzu-chiang (王子鏘) told a shareholders’ meeting yesterday that had a 67.47 percent turnout rate.
Wang called the deal loss-making and over-priced since Metlife Taiwan, the local operations of US life insurer MetLife Inc, hasn’t set aside enough reserves to address its policy liability of NT$30.9 billion (US$960 million).
He joined another supervisor to urge Waterland Financial to immediately launch another review before reaching a conclusion.
Both supervisors and three board members, who represent Nice Group (耐斯集團), a shareholder with a 7 percent stake in Waterland Financial, remain strong opponents of the deal.
To close the deal, the next biggest hurdle will be regulatory approval from the Financial Supervisory Commission’s insurance bureau, which a company source said will never arrive.
“[We were tipped off that] head of the insurance bureau Huang Tien-mu [黃天牧] told the commission chairman that the commission will end up having to pay numerous visits to the Special Investigation Division [should a regulatory approval be granted],” he said.
Staffers at the insurance bureau office, however, denied such comments.
Waterland board director James Wei (魏憶龍) said the 90.52 percent approval vote to endorse the acquisition at yesterday’s meeting ineffective since shareholders were not fully informed of the deal’s evaluation.
Several shareholders, whose motions to call off the vote were ignored, threatened to file lawsuits against the management and those shareholders giving consent to the acquisition.
Analysts had warned earlier that the acquisition could put Waterland under greater capital pressure and earnings volatility.
However, Waterland chairman Steven Hung (洪三雄), who represents Hotel Taipei Miramar (美麗華飯店) with a 27 percent stake in the financial holding firm, reiterated that the acquisition would be worthwhile, giving an extra boost of NT$80 billion to the company’s assets, currently NT$180 billion.
In related news, Fubon Financial Holding Co (富邦金控) yesterday approved a NT$35 billion fundraising plan at its shareholders’ meeting. The company also decided to give out a cash dividend of NT$2 per share and stock dividend of NT$0.5 per share.
Waterland shares ended 0.1 percent lower at NT$9.7 yesterday on the Taiwan Stock Exchange. The stock has declined 6.73 percent so far this year, compared with a fall of 8.71 percent on the benchmark TAIEX over the same period.
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