CTBC Financial Holding has escalated the competition for Shin Kong Financial Holding, offering over US$4 billion for a controlling stake to create Taiwan ‘s largest finance group.
CTBC is offering NT$14.55 per share in cash and stock for up to 51% of Shin Kong, Taiwan’s fifth-largest financial conglomerate, as disclosed during a briefing on Friday (Aug 23). This bid, which represents a 17% premium over Shin Kong’s last closing price, surpasses a rival offer from Taishin Financial Holding, which proposed a stock swap valued at NT$11.32 per share.
This latest bid marks a pivotal moment in Taiwan’s banking sector as local authorities aim to strengthen the island’s financial industry and diversify its economy beyond its tech-heavy focus. If successful, the acquisition of Shin Kong would be the first financial holding transaction in Taiwan since Fubon Financial Holding acquired Jih Sun Financial Holdings in 2022.
Under CTBC’s proposal, Shin Kong shareholders would receive 0.3132 of a CTBC share plus NT$4.09 in cash per share. This amounts to a total expenditure of NT$131.4 billion (S$5.4 billion) for the 51% stake, according to CTBC President Rachael Kao.
CTBC, with its board’s approval just three days earlier, aims to form Taiwan’s largest financial holding company by assets. The company disclosed the offer details on Friday, a day after Taishin and Shin Kong announced their own merger plans.
Shin Kong shareholders plan to vote on the Taishin deal at an October 9 meeting. However, it remains uncertain whether CTBC can attend the meeting to block Taishin’s bid. Current regulations require CTBC to own Shin Kong shares before September 10 to participate, but the bank cannot acquire shares until it receives approval from the Financial Supervisory Commission, which might come after the deadline.