China Development Industrial Bank (
China Development successfully acquired 140.9 million Grand Cathay shares, or 12 percent of the company, through yesterday. When combined with another 6 percent in shares acquired by China Development's subsidiaries earlier this year, the bank has gained control of 18 percent of Grand Cathay.
China Development received approval from the Securities and Futures Commission (證期會) at the end of last month on its tender offer application on Grand Cathay's shares filed earlier last month. China Development offered to buy Grand Cathay for NT$20 a share between April 30 to May 10.
Since China Development's move is the first tender offer ever made in Taiwan after regulations on tender offers were promulgated at the beginning of this year, the case has been closely watched by market players.
Another reason the case has attracted wide attention is that it's an indicator of whether the DPP administration can gain a foothold in the securities sector. Grand Cathay is the largest securities underwriter in Taiwan. China Development has long been viewed as a KMT-affiliated business, although the bank had denied the relationship in the last few years, claiming that the KMT has unloaded most of the company's shares. Grand Cathay, on the other hand, has long been closely controlled by the KMT -- until now.
Things started to change last May, when the DPP administration took over the presidential office. China Development was rumored to have become a pro-DPP business for a number of reasons, including politics. The bank's chairman Liu Tai-yin (
When China Development first announced its tender offer proposal early last month, the proposal was strongly opposed by Grand Cathay and the KMT. Both said they did not welcome such an offer and said they would do all they could to block it.
Originally, China Development offered to acquire 200 million shares of Grand Cathay in the open market at NT$20 a share between April 11 and April 20, which it later rescinded. China Development later proposed the acquisition of 100 million shares under the same condition, and postponed the offer period until yesterday.
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