CTBC Financial Holding Co (中信金控) yesterday officially aborted its bid to acquire Shin Kong Financial Holding Co (新光金控) after the Financial Supervisory Commission made clear its objections to the takeover.
The nation’s third-largest financial conglomerate announced the pullback in a stock exchange filing, nixing a month-long attempt to buy Shin Kong Financial through a public tender offer and share swaps totaling NT$14.55 per share.
The offer is higher than the NT$14.18 per share which Taishin Financial Holding Co (台新金控) proposed in its bid to merge with Shin Kong Financial through full share swaps earlier this month.
Photo: An Rong Xu, Bloomberg
“We have decided to halt investment [in Shin Kong Financial] in line with the Financial Supervisory Commission’s decision on the matter,” the filing said.
FUNDING ISSUES
The commission on Monday said it had reservations about the buyout attempt due to concerns that CTBC Financial intended to buy 51 percent of Shin Kong Financial shares on the open market and via share swaps.
The venture lacked details about how CTBC Financial would secure the necessary funding and what it would do with Shin Kong Financial shares if the buyout failed, the commission said at the time.
CTBC Financial also failed to commit to capital increases for Shin Kong Life Insurance Co (新光人壽) and displayed a lack of understanding about the financial state of the main subsidiary of Shin Kong Financial, the commission said.
The regulator said that companies usually use all-cash advances in hostile takeover bids and set the share purchase target to higher than 80 percent to avoid management rights disputes.
COMMISSION ANGERED
On Tuesday, CTBC Financial responded by indicating that it would call a board meeting later yesterday and revise buyout terms to clarify any misunderstandings.
However, that angered the commission, which on Thursday said that it disliked any moves that would upset or destabilize the financial markets and suggested that CTBC Financial should drop the effort.
CTBC Financial unveiled its investment plan after Taishin Financial and Shin Kong Financial reached a merger agreement after long discussions, the commission said, adding that the Shin Kong Financial share price has been volatile recently.
The two conglomerates would call shareholder meetings on Oct. 9 to vote on the merger and then seek regulatory approval from the commission.
Semiconductor shares in China surged yesterday after Reuters reported the US had ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to halt shipments of advanced chips to Chinese customers, which investors believe could accelerate Beijing’s self-reliance efforts. TSMC yesterday started to suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the US Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday, citing an unnamed source. The US imposed export restrictions on TSMC’s 7-nanometer or more advanced designs, Reuters reported. Investors figured that would encourage authorities to support China’s industry and bought shares
TECH WAR CONTINUES: The suspension of TSMC AI chips and GPUs would be a heavy blow to China’s chip designers and would affect its competitive edge Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is reportedly to halt supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on 7-nanometer or more advanced process technologies from next week in order to comply with US Department of Commerce rules. TSMC has sent e-mails to its Chinese AI customers, informing them about the suspension starting on Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday. The US Department of Commerce has not formally unveiled further semiconductor measures against China yet. “TSMC does not comment on market rumors. TSMC is a law-abiding company and we are
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
RSS