State-run Mega Financial Holding Co (兆豐金控) yesterday said it has decided to scrap a planned share sale in Taiwan Business Bank (台灣企銀), days after the proposal raised concerns about a potential hostile takeover bid by Waterland Financial Holdings Co (國票金控).
In a filing with the Taiwan Stock Exchange, Mega Financial said it would abandon its proposal to sell 636.48 million shares in Taiwan Business Bank on the open market.
Mega Financial did not specify why it was giving up a chance to possibly offload the Taiwan Business Bank shares while the company is under government pressure to sell the stake in the absence of acquisition or merger attempts by June next year.
WATERLAND WORRIES?
However, the company’s share sale plan last week attracted the interest of Waterland Financial, the only bills-financing-focused conglomerate in the nation, which viewed it as an opportunity to acquire a 12 percent stake in Taiwan Business Bank.
On Friday, Waterland Financial said in a statement that it hoped an investment in a lender like Taiwan Business Bank would enable it to gain more banking clients and create another source of earnings.
However, the Financial Supervisory Committee has reportedly refused Waterland Financial’s application to purchase the shares, according to local media reports.
MINISTRY OF FINANCE
The commission has also reportedly postponed Mega Financial’s liquidation plan for the small lender’s shares, considering opposition from the Ministry of Finance.
The ministry is the biggest shareholder in Taiwan Business Bank, via its control of various state-run firms, with about 33.9 percent of shares.
Industry watchers have expected that the government could be becoming more constructive on domestic consolidation of the state-controlled banks, because Taiwan’s banking industry is one of the most fragmented in Asia.
According to statistics provided UBS AG, the five largest banks in Taiwan — all state controlled — account for 38 percent of the market, compared with between 50 and 80 percent seen in most Asian economies.
Additional reporting by Crystal Hsu
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