IBF Financial Holdings Co Ltd’s (國票金控) board of directors on Wednesday approved a plan to enter acquisition negotiations with another company, despite two independent directors’ objection, the firm said in a filing to the Taiwan Stock Exchange.
IBF declined to comment on speculation that EnTie Commercial Bank (安泰銀行) is its target, but said that it has signed a confidential memorandum of understanding with the targeted firm, IBF said.
The Company Act (公司法) stipulates that acquisition plans require approval by at least half of the attendees of a board meeting, in which at least half of the board members are present. This suggests that at least seven of IBF’s 13 board members supported the proposal.
Independent directors Chen Wei-lung (陳惟龍) and Wu Ching-sung (吳青松) objected the plan, and independent directors Joseph Jao (饒世湛) and Chen Shu-chuan (陳淑娟) voted in support, IBF said.
The Securities and Exchange Act [證交法] stipulates that a listed company must disclose when independent directors disapprove a acquisition proposal.
Wu criticized that IBF would fund the acquisition by cash and through the issuance of convertible preferred stocks, potentially affecting its financial structure, IBF said.
There was no sufficient explanation why it is willing to pay a premium to acquire the other firm, the filing cited Wu as saying.
However, the filing cited Jao as saying that that IBF has a limited development potential if it does not acquire the other firm.
IBF shareholders’ equity (business net worth) totaled NT$42.76 billion (US$1.51 billion) last month, the lowest among Taiwan’s 15 listed financial conglomerates, while EnTie Bank’s shareholders’ equity was NT$34.51 billion, ranking 30th among the nation’s 37 banks, Financial Supervisory Commission data showed.
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