Taishin Financial Holding Co (台新金控) yesterday raised its terms to merge with Shin Kong Financial Holding Co (新光金控) via share swaps, in a bid to compete with a rival tender offer from CTBC Financial Holding Co (中信金控).
Tashin Financial president Welch Lin (林維俊) and Shin Kong Financial president Stephen Chen (陳恩光) unveiled the revised share swap schemes at a news conference at the Taiwan Stock Exchange in Taipei last night.
Under the new terms, Taishin Financial plans to issue new shares for Shin Kong Financial shares, with a share swap ratio of 0.672 Taishin Financial common shares for one Shin Kong Financial common share, and one Taishin Financial preferred share for 0.175 Shin Kong Financial preferred share.
Photo: CNA
The preferred shares would receive an annual interest rate of 1.665 percent before their buyback three years later, Lin added.
The revised terms would suggest a merger price of NT$14.18 per share, a 25 percent increase from NT$11.32 per share it proposed last month, and a 5 percent premium over Shin Kong’s closing price at NT$13.5 yesterday, Lin said.
CTBC Financial last month proposed buying 51 percent of Shin Kong Financial shares on the open market and via share swaps totaling NT$14.55 per share.
The changes are intended to speed up the merger, which still needs approval from the Financial Supervisory Commission and separate shareholders’ meetings next month, Lin said.
The arrangements would allow Taishin Financial to keep more than NT$20 billion (US$622.96 million) of cash on hand to meet unforeseen scenarios, he said.
Hopefully, regulators and shareholders would give favorable considerations and reject CTBC Financial’s hostile takeover attempt, Lin said.
“Taishin Financial’s offer is solid and will be written into the merger document while CTBC Financial’s terms might be shrinking due to its recent share price corrections,” he said.
The term revisions came after Taishin Financial used second-quarter earnings data to evaluate the deal, while last month’s offer was based on first-quarter financial results, Lin said.
Shin Kong Financial’s 15-member board voted 11 to 4 in favor of merging with Taishin Financial as the two companies share a common corporate culture, Chen said.
After the merger, Shin Kong Financial would become part of Taishin Financial and the new entity would be renamed Taishin Shin Kong Financial Holding Co (台新新光金控).
Chen warned Shin Kong Financial shareholders against too-good-to-be-true terms put forth by CTBC Financial, saying it might sacrifice the interest of the remaining 41 percent shareholders.
Lin also challenged CTBC Financial to shed light on the details of its merger plans for Shin Kong Financial given its low cash available.
On Tuesday, CTBC Financial said it would adopt the new title of CTBC Shin Kong Financial Holding Co (中信新光金控) and retain all Shin Kong Financial employees for three years if its bid for Shin Kong Financial moves forward smoothly.
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