Taishin raises bid for Shin Kong in what could be Taiwan’s biggest financial deal

Taiwanese financial conglomerate Taishin said it would raise its bid for peer Shin Kong by 25% to about T$222.4 billion (US$7 billion), in a deal that would be the largest merger in Taiwan’s financial services industry .

The long-standing tie-up between Taishin and Shin Kong, announced last month, had to face an unexpected rival bid from CTBC Financial to acquire Shin Kong, although the target says it views Taishin as the preferred bidder.

Taiwan’s financial services industry tends to be quite domestically focused, and Taishin and Shin Kong hope that through the merger they can expand their footprint and become a more globally competitive firm while creating long-term value.

Update: CTBC Financial Plans to Buy Rival Shin Kong

Taishin will offer 0.672 common shares and 0.175 preferred shares per share to Shin Kong for a 100 percent stake in the revised all-share deal, sweetening the pot from the 0.6022 common share exchange previously offered, Taishin and Shin Kong said late Wednesday.

The offer will convert to $14.18T per Shin Kong share based on Wednesday’s closing prices, 25% more than originally offered, Taishin said, though slightly less than the $14.55T per share offered of CTBC for a 51% stake through a share mix. and cash.

“Our offer applies to 100% of Shin Kong shareholders, while CTBC’s offer is for only 51% of the shares. What price could the remaining 49% of shareholders get from CTBC (or the market) for their shares?” Taishin Chairman Welch Lin told reporters. “It’s a major uncertainty.”

A merger between Taishin and Shin Kong would make it the island’s fourth-largest financial firm, with combined assets estimated at around T$8.3 trillion.

CTBC declined to comment on Taishin’s high bid.

Gaining control of Shin Kong would make CTBC Taiwan’s largest financial firm with combined assets estimated at T$13.46 trillion, just above Cathay Financial’s T$13.27 trillion.

Taishin shares fell 1.9 percent Thursday morning, while Shin Kong fell 1.1 percent, underperforming a 3 percent gain in the broader index .TWII. CTBC was trading 0.6% lower.

(Reporting by Faith Hung; Editing by Ben Blanchard and Jamie Freed)