Taipei, Fubon Financial Holding Co., one of the leading financial holding companies in Taiwan, on Monday dismissed speculation that its deal to acquire the smaller Jih Sun Financial Holding Co. is aimed at helping the latter’s Chinese tycoon shareholder to dispose of his assets for cash.
In a statement, Fubon Financial said before it announced on Friday a tender offer to acquire Jih Sun Financial that the company had never made any contact with any of the latter’s two majority shareholders — Japan’s Shinsei Bank and Hong Kong-based Capital Target Ltd. — which is reportedly owned by Chinese tycoon Xiao Jianhua (肖建華), head of the Chinese conglomerate Tomorrow Holding.
Fubon Financial said the financial terms of the acquisition deal are fair to all of Jih Sun Financial shareholders, no matter whether they are majority or minority holders, and it gave its assurance that the acquisition process will be transparent.
The comments came after local media cited Democratic Progressive Party (DPP) Legislator Kao Chia-yu (高嘉瑜) as saying she suspects that Fubon Financial’s buy-in deal was planned to help Xiao dispose of his assets by transferring his stake in Jih Sun Financial from Capital Target to the Taiwanese suitor.
Kao said that as Fubon Financial has heavy investment in China, the company had no choice but to yield to pressure to China. The DPP lawmaker has asked the Financial Supervisory Commission (FSC), Taiwan’s top financial regulator, to launch a probe into whether Capital Target is founded by Chinese funding.
According to the local media, Shinsei Bank and Capital Target currently owns a 35.49 percent stake and a 24.09 percent stake in Jih Sun Financial, respectively.
In the statement, Fubon Financial said the acquisition deal has nothing to do with China’s Tomorrow Holding, adding that even if the company wanted to help Tomorrow Holding dispose of its assets for cash, it would simply have bought it overseas directly instead of through Jih Sun Financial in Taiwan through a tender offer.
Fubon Financial said the largest shareholder of Xiamen Bank, in which the company has invested, is China’s Xiamen city government, and the largest shareholder of China’s Harbin Bank, in which Fubon Financial’s 100 percent-owned subsidiary Fubon Life Insurance Co. has invested, is the Harbin city government, so the financial holding’s investments in China are irrelevant to Tomorrow Holding.
Under the tender offer, Fubon Financial will acquire a 50.01 percent stake in Jih Sun Financial for NT$24.53 billion (US$873 million), or NT$13 per share, which represents a 24.8 percent premium over Jih Sun Financial’s average share price over the previous 20 trading sessions before Friday.
The tender offer, which has been approved by the FSC, Taiwan’s top financial regulator, will begin on Dec. 22 and run through Feb. 1.
If the tender offer proceeds to buy the minimum of a 50 percent stake in Jih Sun Financial by Feb. 1, Fubon Financial will continue to acquire the remaining stake in Jih Sun Financial to reach its goal of bringing the rival under its corporate umbrella completely. The total cost for the deal will stand at about NT$49 billion.
Fubon Financial has said the company has been eyeing Jih Sun Financial’s securities business, with the expectation that the acquisition will allow the company to own Jih Sun Securities, which will boost its share by 3.59 percent to 9.13 percent, the second-largest in Taiwan.
Source: Focus Taiwan News Channel