Shareholders of SinoPac Financial Holdings Co (永豐金控) and King’s Town Bank (KTB, 京城銀行) yesterday approved a merger plan that could make SinoPac Taiwan’s seventh-largest financial conglomerate.
The companies signed a merger agreement in December last year according to which SinoPac would buy 100 percent of KTB shares for NT$60 billion (US$1.82 billion) through cash and share swaps.
Under the share swap, one common KTB share would trade for 1.15 SinoPac shares, the companies said.
Photo: Lee Chin-hui, Taipei Times
SinoPac Financial president Stanley Chu (朱士廷) has said the integration would enable SinoPac to serve more customers in southern Taiwan.
Most of Tainan-based KTB’s 66 branches are in Yunlin County, Chiayi County, Tainan, Kaohsiung and Pingtung County, while most of SinoPac’s 125 branches are in northern Taiwan, Chu said.
KTB chairman Tai Chen-chih (戴誠志) has said he intends to retire and the lender’s vice chairman Tsai Chiung-ting (蔡炅廷) has said he is not interested in taking over.
Tai and Tsai would not join SinoPac’s boardroom following the completion of the one-year integration, as they prefer to be shareholders and trust SinoPac’s management to the board, Chu said.
SinoPac said would next seek approval from the Financial Supervisory Commission for the acquisition, even though the KTB workers’ union last week rejected its retention and compensation offers.
SinoPac earlier said it would retain all KTB employees for at least three years and would provide bonuses for those who choose to stay, especially banking professionals.
The premium linked to the buyout bid has fallen from 8.8 percent in December last year to 4.36 percent on Thursday last week, as a result of local share corrections, Taiwan Stock Exchange data showed.
The merger would also make SinoPac’s banking arm Bank SinoPac (永豐銀行) the third-largest lender in Taiwan by measure of loans to small and medium-sized enterprises, SinoPac Financial said.
KTB focuses on commercial banking, while SinoPac is more specialized in institutional banking and serving firms with larger amounts of capital, Chu said.
KTB would auction off its capital leasing unit and liquidate its securities arm, as the former has a different business orientation from SinoPac’s capital leasing unit, the two sides said.
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