Taishin Financial Holding Co (台新金控) and Shin Kong Financial Co (新光金控) yesterday jointly said they were confident their proposed merger would win approvals at their respective shareholders’ meetings tomorrow, ushering in a new era for both entities.
Taishin Financial president Welch Lin (林維俊) and Shin Kong Financial president Stephen Chen (陳恩光) made the announcement during a media briefing in Taipei.
Foreign institutional investors would largely support the merger and more than 70 percent would take part in the shareholders’ meetings to show their support, Lin said.
Photo: Kelson Wang, Taipei Times
“The turnout this time would surpass my expectation,” said Lin, who recently finished roadshows to drum up support for the merger.
Foreign institutional investors placed great importance on the merger plan, which would create substantial synergies for life insurance-oriented Shin Kong Financial and bank-focused Taishin Financial, Lin said.
The two companies would hold their respective shareholders’ meetings tomorrow and would file the merger application with the Financial Supervisory Commission on Friday, Lin said.
Taishin Financial has proposed to carry out the merger through share swap arrangements, where one Shin Kong share would be traded for 0.672 Taishin Financial common shares and 0.175 Taishin Financial preferred shares.
The preferred shares would receive an annual interest rate of 1.665 percent before their buyback three years later.
The scheme would suggest a merger price of NT$14.18 (US$0.44) per share, or a 17.67 percent premium based on Shin Kong’s closing price of NT$12.05 on the main board yesterday.
Taishin Financial would be the surviving entity, Shin Kong Financial would be delisted and the new conglomerate would be named Tashin Shin Kong Financial Holding Co (台新新光金控), Lin said, adding that it would become Taiwan’s fourth-largest financial conglomerate based on assets.
The merger would bolster bilateral life insurance and banking businesses, and shore up bilateral securities operations, he said.
Taishin Financial would address the commission’s concern over the capital strength of Shin Kong Life Insurance Co (新光人壽), the main subsidiary of Shin Kong Financial, Lin said.
As of June 30, Taishin Financial has a capital adequacy ratio of 120 percent and double-leverage ratio of 113 percent, and is ready for capital increases to support Shin Kong Life if necessary, he said.
The readings at Shin Kong Financial would improve after the proposed merger, Lin added.
However, Shin Kong Financial’s majority shareholder and former board director Lin Po-han (林伯翰) has vehemently opposed the merger and asked like-minded shareholders to reject the proposal to ensure that Shin Kong Financial would continue to exist.
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