Shin Kong Financial Holding Co (新光金控), Taiwan’s fifth-largest financial conglomerate, returned to a profit of NT$20.5 billion (US$639.39 million) in the first half of the year as it faces rival takeover bids.
The financial group’s insurance unit was helped by capital gains on stocks and improved hedging costs, it said in a statement yesterday.
Earnings per share of NT$1.32 compared with losses per share of NT$0.41 a year earlier.
Photo: CNA
Shin Kong is at the heart of a bidding war between CTBC Financial Holding Co (中信金控), which has offered about US$4.1 billion in cash and stock for a 51 percent stake, and a lower, mutually agreed deal with Taishin Financial Holding Co (台新金控).
Shin Kong Financial president Stephen Chen (陳恩光) yesterday said that the group’s preference was for a deal with Taishin Financial.
“Shin Kong wants a merger to deliver sustainable development and won’t necessarily prioritize a higher offer,” Chen said at an earnings conference in Taipei.
“Shin Kong has had a longer relationship with Taishin in terms of deal talks” and a successful “marriage” requires mutual understanding, he said.
Shin Kong Financial, whose founder was a brother of Taishin Financial’s founder, would keep discussing a merger with Taishin, including a potential tweak of their agreed share-swap ratio to make the deal more attractive, Chen said.
“There is only one consensus merger company for Shin Kong Financial, that’s Taishin Financial,” Shin Kong Financial said in a separate statement released at the conference, denouncing CTBC Financial’s offer as a “raid.”
The first-half result underscores the attraction of Shin Kong Financial, which had an uneven performance during the COVID-19 pandemic. A successful bid would help CTBC Financial vault over two bigger firms to become the nation’s biggest financial company.
At least five analysts had downgraded their recommendations on CTBC Financial stock after its bid last month on concerns that it is seeking a business that would need injections of capital and a lot of management attention.
Separate results last month from Shin Kong Financial’s life insurance unit showed its capital adequacy ratio had rebounded to above 200 percent, meeting regulatory requirements.
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