CTBC Financial Holding is set to decide against a fresh offer for Shin Kong Financial Holding, according to sources familiar with the situation, paving the way for rival Taishin Financial Holding to move ahead with one of the biggest combinations in Taiwan’s financial industry in years.
CTBC is poised to walk away from the takeover battle after facing opposition from Taiwanese regulators, the sources said, asking not to be identified because the matter is private. The financial services group had been evaluating the feasibility of a new offer after Taishin made a revised bid that values Shin Kong at about NT$243 billion (S$9.8 billion), the sources said.
CTBC is scheduled to hold a board meeting on Friday (Sep 20), the sources said. A representative for CTBC did not immediately respond to requests seeking comment.
Taiwan regulators rejected CTBC’s takeover bid for smaller rival Shin Kong on Monday, blocking the creation of what would have been the island’s biggest financial group. CTBC’s plan was not comprehensive enough and lacked a guarantee to increase capital for Shin Kong’s life insurance arm, the Financial Supervisory Commission’s (FSC) vice chairperson Jean Chiu said.
Taishin revised its offer on Sep 11 to value Shin Kong at NT$14.18 per share, 25 per cent higher than its original stock-swap proposal, but lower than CTBC’s offer of NT$14.55 in cash and stock for a controlling stake. Taishin and Shing Kong have been discussing a merger for more than two years.
Shin Kong shareholders will vote on the deal with Taishin on Oct 9. If cleared by regulators, including the FSC and Fair Trade Commission, the new Taishin-Shin Kong will become the fourth-largest financial holding company in Taiwan.
The bidding war flared in late August when CTBC made its offer following the announcement of a mutually agreed merger between Taishin and Shin Kong.
Taiwanese regulators are trying to lift the financial industry and make the economy less concentrated on the technology sector. A Shin Kong deal would be the first financial holding transaction in Taiwan since Fubon Financial Holding acquired Jih Sun Financial Holdings in 2022. BLOOMBERG
