Taipei, Dec. 28, 2012 (CENS)--Fubon Financial Holding announced yesterday (Dec. 27) joining hands with its subsidiary Taipei Fubon Bank to obtain 80% stake in First Sino Bank of mainland China and take part in the cash capital increment of the latter, with total investment amounting to 6.45 billion yuan (NT$30.6 billion).
An insider said that Pou Chen Group, a leading footwear maker in Taiwan and the largest shareholder of First Sino Bank, will obtain 4% interest in Fubon Financial Holding by participating in an NT$10 billion cash capital increment of Fubon Holding after it sells its shareholding in First Sino Bank to Fubon.
First Sino Bank is a national bank in China, owning 14 branches and offices which are located in Yangtze Delta, Zhu River Delta, and Pan-Bohai Area. The acquisition of First Sino Bank will complement the business network of Xiamen Bank, an affiliate of Fubon Financial Holding, in the western coast of Taiwan Strait, enabling Fubon Holding to complete its deployment in major coastal economic areas of the mainland initially.
Daniel Tsai, chairman of Fubon Holding, remarked that acquisition of 80% controlling stake in First Sino Bank marks a stride for Fubon in its long-term deployment in China. In the wake of the acquisition, Fubon Holding will become the Taiwanese financial institution with the most comprehensive financial-service platform in greater China, including Taipei Fubon Bank in Taiwan, Fubon Bank Hong Kong, and Xiamen Bank (with 19.99% stake) and First Sino Bank in the mainland.
Victor Kung, president of Fubon Holding, pointed out that the board of directors of Taipei Fubon Bank and Fubon Holding already approved the plan to invest in First Sino Bank yesterday and Fubon Holding will file application for the deal with regulators in both Taiwan and the mainland. After completion of the deal, possibly in the second half next year, First Sino Bank will be renamed Fubon First Sino Bank.
Victor Kung noted that Taipei Fubon Bank and Fubon Holding will jointly spend 5.65 billion yuan to purchase 80% stake in First Sino Bank from the latter’s existing shareholders, of which Taipei Fubon Bank will hold 51% and Fubon Holding 29%. The investment is translated into 2.18 times for price/book value ratio and the transaction price reaches NT$23.21 per share.
By selling their stakes in First Sino Bank to Fubon, Pou Chen Group, Wing Hang Bank of Hong Kong, and SPD Bank of Shanghai, the existing major shareholders of First Sino Bank, will take back 4.669 billion yuan, 706.3 million yuan, and 274.7 million yuan, respectively. Subsequently, Pou Chen will buy into Fubon Holding, teaming up to expand their business scope.
After the deal, SPD Bank will still retain 20% interest in First Sino Bank. Victor Kung expressed that Fubon and SPD Bank may cooperate in business development. Subsequently, Taipei Fubon Bank, Fubon Holding, and SPD Bank will take part in the 1 billion-yuan cash capital increment of First Sino Bank, according to the shares of their stakes.
(by Philip Liu)