Taishin to buy Tong Shing Securities
Taiwan-based Taishin Financial Holding Co. Ltd. disclosed Dec. 10 a plan to buy 100 percent of Tong Shing Securities Co. Ltd. for NT$1.147 billion (US$35.5 million).
The board of directors of the financial holding company approved the acquisition at a price of NT$11.13 per share. Company president Lin Keh-hsiao said his firm will apply to the Financial Supervisory Commission for the Tong Shing deal as soon as Taishin’s sale of a securities arm to KGI Securities Co. Ltd. is completed as scheduled on Dec. 19.
Taishin Financial in May announced a decision to sell Taishin Securities Co. Ltd. to KGI and indicated an interest in acquiring a smaller securities firm in order to comply with regulatory requirements concerning the structure of financial holding companies.
The buyer expects to receive a green light on the Tong Shing transaction from the FSC within 15 working days of application if all goes smoothly. It will then be able to proceed with the Tong Shing trade.
With Tong Shing coming under the Taishin umbrella, the financial holding company will be able to maintain operations in banking, securities and bills finance so as to reduce the impact of selling Taishin Securities.
Lin stated that the acquisition of Tong Shing will allow Taishin Financial to provide complete financial services to corporate clients.
Based in southern Kaohsiung City, Tong Shing was established in 1990. The regional independent securities house has a capital of NT$1.03 billion, with just one base of operations. There will be no immediate capital expansion for the unit following the prospective transaction. The parent company will consider such a move when the subsidiary’s operations achieve a certain target level, according to Lin.
Taishin Securities has been a major contributor to the financial holding company since the onset of the global financial tsunami. In the first 11 months of the year, the parent booked profit of NT$1.39 billion while the securities unit registered NT$1.5 billion in net profit equivalent to NT$1.13 per share.
Taishin Financial had no choice but to dispose of Taishin Securities as the holding company had NT$36.5 billion in funds parked in Chang Hwa Bank shares earlier. (HML-THN)
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