China Development Financial Holding Corp (中華開發金控) plans to acquire more of China Life Insurance Co (中國人壽) via a public tender of NT$23.6 per share, which would boost its stake in the life insurer to 55.95 percent, it said yesterday.
The company would conduct the public tender for a further 21.13 percent stake upon approval from the Financial Supervisory Commission (FSC), China Development Financial spokesman Richard Chang (張立荃) told a news conference in Taipei.
The maximum number of shares to be acquired in the offer would be 1 billion, or 21.13 percent of China Life’s issued shares, with the minimum set at 236.57 million shares, or 5 percent, Chang said.
PREMIUM
The per-share offer price would represent a premium of 17.2 percent compared with China Life’s average closing price of NT$20.14 over the past 20 days, he said, adding that the offer was based on an assessment by PricewaterhouseCoopers Taiwan.
Asked if the retail shareholders of China Life would be willing to sell their shares given that in 2017 China Development Financial acquired a 25 percent stake in China Life at NT$35 per share, he said that the premium was 17 percent last time.
The announcement was unexpected, as the FSC has ordered China Development Financial to fully acquire the insurer before the tenures of China Life’s board members expire on June 13, 2022.
TIMING
“We think it is a good time now,” Chang said.
With another 21.13 percent stake after this transaction, China Development Financial could easily take control of the insurer, he said.
China Development Financial would use NT$10 billion (US$347.09 million) raised from its corporate bonds, NT$3 billion of capital from its two units, CDIB Capital Group (中華開發資本) and KGI Securities Ltd (凱基證券), and other funds it has to make the acquisition, Chang said.
LEVERAGE
The company’s leverage ratio would remain stable, Chang said.
When the company would purchase another shares in China Life has not been decided, but it is still CDFHC’s goal to fully acquire China Life, he said.
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