Taiwan regulator rejects CTBC’s US$4.1 billion bid for Shin Kong

TAIWAN regulators rejected CTBC Financial Holding’s US$4.1 billion takeover bid for smaller rival Shin Kong Financial Holding, 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.

The rejection means Shin Kong can proceed with a friendly merger with Taishin Financial Holding, subject to shareholder approval. The decision is a blow to CTBC, which had pledged not to cut jobs for three years to win regulatory approval, hoping it would gain the scale to compete regionally.

Shin Kong shareholders will vote on a share swap deal with Taishin on Oct 9. Taishin raised its offer last Wednesday (Sep 11), valuing Shin Kong at NT$14.18 per share, or about NT$243 billion (S$9.9 billion), 25 per cent higher than its original stock swap proposal.

If that deal is cleared by regulators, including the FSC and Fair Trade Commission, the new Taishin-Shin Kong Financial Holding will become the fourth-largest financial holding company in Taiwan.

Shin Kong president Stephen Chen had earlier affirmed the group’s preference for a tie-up with Taishin, which had pushed the regulator to prioritise its friendly deal, claiming a hostile takeover could impact industry stability. BLOOMBERG