SinoPac Financial Holdings Co (永豐金控) said yesterday that it plans to buy 100 percent of King’s Town Bank (KTB, 京城銀行) for NT$60 billion (US$1.83 billion) through cash and share swaps.
The two financial institutions would seek approval from regulators and shareholders next year, after respective board directors yesterday gave the green light, SinoPac spokesperson Kerry Hsu (許如玫) told reporters at the Taiwan Stock Exchange last night.
SinoPac would sponsor the deal with 50 percent in cash and the remaining half through a share swap scheme, Hsu said.
Photo: Kelson Wang, Taipei Times
Under the share swap arrangement, one common KTB share would trade for 1.15 SinoPac shares, Hsu added.
“We believe that the deal, valued at 1.1 times King’s Town’s price-to-book ratio, is reasonable, as the merger would enable SinoPac to reach out to more customers in southern Taiwan,” SinoPac Financial president Stanley Chu (朱士廷) said.
Most of King’s Town’s 66 branches are in Yunlin County, Chiayi County, Tainan, Kaohsiung and Pingtung County, while most of SinoPac’s 125 outlets are in northern Taiwan, Chu said.
SinoPac would retain all KTB employees for at least three years, Chu said, adding that SinoPac would provide bonuses for those who choose to stay, especially banking professionals.
The merger would make SinoPac Taiwan’s seventh-largest conglomerate by assets and the third-largest lender measured by loans to small and medium-sized enterprises (SME), Hsu said.
The synergy benefits also apply to banking services, given that KTB focuses on commercial banking, while SinoPac is more specialized in institutional banking and serving firms with larger amounts of capital, Chu said.
KTB chairman Tai Chen-chih (戴誠志) and vice chairman Tsai Chiung-ting (蔡炅廷) would not join SinoPac’s boardroom after an expected one-year integration because they prefer to be shareholders and trust SinoPac’s management, Chu said.
KTB would auction off its capital leasing unit and liquidate its securities arm, Chu said, adding that the former has a different business orientation from SinoPac’s capital leasing unit.
KTB’s securities house is small and should be able to settle its business with its current clients, Chu said.
Shares in SinoPac yesterday closed down 0.42 percent at NT$23.6, while KTB shed 0.9 percent to NT$49.55, Taiwan Stock Exchange data showed.
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