Fubon Financial Holding Co (富邦金控) yesterday said CTBC Financial Holding Co’s (中信金控) hostile takeover bid for Shin Kong Financial Holding Co (新光金控) could set off a domino effect if it pushes through.
“The buyout would definitely set off a domino effect if CTBC Financial crosses the finish line,” Fubon Financial president Jerry Harn (韓蔚廷) said at an earnings conference in Taipei.
Fubon Financial, the nation’s most profitable financial conglomerate and the second-largest by assets, said it is interested in merger and acquisition activities, but would avoid hostile takeover attempts, if possible.
Photo: An Rong Xu, Bloomberg
The company, which acquired Jih Sun Financial Holding Co (日盛金控) through a public tender offer in 2022, said that capital planning and communication with employees carried the most weight in the deal.
It had spent NT$50 billion (US$1.57 billion) on securing 53.84 percent of Jih Sun shares, Harn said.
By contrast, CTBC Financial has proposed a cash and share swap deal that would require NT$131.4 billion to buy a 51 percent stake in Shin Kong and NT$36 billion in cash.
CTBC Financial’s pockets are deep enough, but the other contender, Taishin Financial Holding Co (台新金控), is not utterly hopeless after spending years on the merger effort, Harn said.
“The drama grows increasingly complicated… No one knows how it would end until the last minute,” he said.
Harn declined to comment on Shin Kong Financial’s worth, saying it is difficult to arrive at a fair value without conducting due diligence.
Shin Kong Financial’s board of directors on Thursday last week voted in favor of a merger with Taishin Financial despite a protest from its former chairman Eugene Wu (吳東進) and allies, who turned to CTBC Financial for help.
Taishin Financial is offering to buy at NT$11.32 per Shin Kong Financial share while CTBC Financial is proposing NT$14.55 per share.
Harn doubts CTBC Financial’s ambition to become the best player in its field in Taiwan, saying that Fubon Financial has consistently proven to be the most profitable financial services provider over the years.
Fubon Financial posted NT$81.31 billion of net income in the first half, up 89.5 percent year-on-year, and earnings per share were NT$5.97, the highest among local financial holding companies.
As of the end of June, the company’s total assets grew 7.7 percent year-on-year to NT$11.7 trillion and its net worth rose 26.1 percent to NT$937.6 billion, with net value per share of NT$64.67, the company said.
Return on assets and return on equity were higher than the same period last year at 1.42 percent and 18.69 percent respectively, it said.
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