The US firm Legacy Partners Group last week threw its support behind Taiwan International Securities Corp's (金鼎證券) management, helping shore up its defenses against a possible hostile bid from larger rival China Development Financial Corp (中華開發金控), the nation's 13th largest financial group by assets.
The US firm has been engaged in talks with interested international investors from the US and Asia on injecting funds into Taiwan International Securities in a move to support the management, said J. Carter Beese, Jr, senior adviser to Legacy Partners, in an interview with the Taipei Times in Taipei last week.
"We are comfortable with the current management team," Beese said.
PHOTO: WANG MIN-WEI, TAIPEI TIMES
The investment amount is part of the ongoing talks, he said, shying away from confirming a possible injection of NT$6 billion (US$190 million) reported by the local press.
An injection of that amount would account for the bulk of the capital of Taiwan International Securities, which has NT$10.8 billion in current capitalization. The significant expansion of capital would dilute rival parties' shareholding and make a hostile takeover bid more difficult and expensive.
Tight-lipped
Beese declined to comment on possible future countermeasures against China Development Financial's yet-to-be-unveiled attempt, citing confidentiality.
"I look forward to working with all the fellow board directors to maximize the value of the company on behalf of all shareholders," said Beese, who will be given one seat to represent Legacy Partners on the board of the Taipei-based securities house in the near future.
The current management of Taiwan International Securities won five out of nine board seats in the general meeting last Tuesday, ending the first round of an intensive power struggle that started in the second half of last year.
The second round of head-to-head competition may start soon, as China Development Financial, which secured the remainder of the board seats and a 41 percent stake, said right after the shareholders meeting that it could continue its buying spree to grab a majority of shares in the brokerage.
This has set the stage for the first hostile takeover attempt in Taiwan's capital market.
In the face of China Development Financial's full-scale attack, Taiwan International Securities in February resorted to Legacy Partners, hoping that Legacy could help it defeat the hostile bid.
Legacy Partners is a Washington-based merger and acquisition investment bank and advisory firm that boats a lineup of star advisers, including Ed Mathiar, managing director of The Carlyle Group, which has strong investment interests in Taiwan, Jack Oliver, chairman of Bryan Cave Strategies who served as national finance chairman for the Bush-Cheney campaign in 2004 and Kenneth Duberstein, who was chief of staff to US president Ronald Reagan from 1988 to 1989.
Industry veteran
Beese served as commissioner of the US Securities and Exchange Commission between 1992 and 1994 and advised on the initial public offerings of globally prominent companies like software giant Microsoft Corp, online retailer Amazon and Internet service provider AOL.
Beese has known Chang Ping-chao (
Market potential
Besides the long-term friendship, access to the business potential in emerging markets in East Asia was another factor that helped create the partnership.
Legacy Partners can use Taiwan International Securities as a gateway to the Taiwan and China markets for investment opportunities and advisory business, given the brokerage's footholds and networking on the both sides of the Strait, according to Beese.
Taiwan International Securities is the 15th-largest broker among the more than 170 securities houses in the brokerage sector and has established four representative offices in China.
The two parties are planning to form a joint venture in investment banking in the near future to tap into China's fledgling but heating-up capital markets, the brokerage said.
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