The board of Chinatrust Financial Holding Co (中信金控) yesterday approved a plan to raise more than NT$60 billion (US1.9 billion) in new capital, paving the way for its bid to acquire the local life insurance unit of American International Group Inc (AIG).
The nation’s third-largest financial service provider said in a statement it intends to issue 3.35 billion common shares on the open market and via subscription by employees and existing shareholders to strengthen its financial health.
“The capital increase is intended to boost financial strength for long-term operations and cross-industry development,” the company said.
The new shares, priced at NT$18 each, are expected to bring in an extra NT$60.3 billion in capital, the company said. It plans to sell 10 percent on the local bourse and offer another 10 percent to employees, with the remaining 80 percent to be subscribed by existing shareholders. Chinatrust Financial president Daniel Wu (吳一揆) last month reiterated keen interest in buying AIG’s 97.57 percent stake in Nan Shan Insurance Co (南山人壽), as the move may be complementary to the group’s bank-centric businesses.
“The company has no intention of switching acquisition targets as the process entails a lengthy review,” Wu said last month.
Chinatrust Financial, which lost in the bidding for Nan Shan to a Hong Kong consortium last year, has refused to comment on the size of any future acquisition.
Cathay Financial Holdings Co (國泰金控), Fubon Financial Holding Co (富邦金控) and a consortium led by Ruentex Group (潤泰集團) chairman Samuel Yin (尹衍樑) have also expressed interest in Nan Shan.
All prospective buyers are due to submit bids on Dec. 3 and AIG may pick a winner or introduce a closer scrutiny one week later, a source with knowledge of the process said by telephone yesterday. A closer scrutiny means to choose from two finalists, the source said.
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