Chinatrust Said to Agree to Buy Tokyo Star for $520 Million

CTBC Financial Holding Co. (2891) agreed to buy Tokyo Star Bank Ltd. for about 52 billion yen ($520 million), the first takeover of a Japanese commercial lender by a foreign bank, two people with knowledge of the matter said.

CTBC, the Taipei-based lender known as Chinatrust, will buy a controlling stake from shareholders including Lone Star Funds, Shinsei Bank Ltd. (8303) and Credit Agricole SA (ACA), the people said, asking not to be named because the information is private. The acquisition is subject to approval from financial regulators in Japan and Taiwan, according to the people.

The deal was reached after a meeting in Tokyo yesterday, one of the people said. Talks had earlier stalled as Tokyo Star Bank’s rising profit and a rally in Japanese bank stocks bolstered shareholders’ expectations of a higher price, three people with knowledge of the situation said on July 5.

Chinatrust said today in a statement to Taiwan’s stock exchange that reports of an agreement to purchase Tokyo Star Bank are speculation, without elaborating.

Raymond Spencer, a spokesman for Shinsei in Tokyo, declined to comment, as did Jed Repko for Lone Star and Anne-Sophie Gentil for Credit Agricole. Hiroki Nakano, a spokesman for Tokyo Star Bank, said the company isn’t in a position to talk about the matter.

The Nikkei newspaper reported the agreement earlier today and said the Taiwanese lender will increase Tokyo Star’s capital, without mentioning how it got the information.

Lone Star agreed to sell Tokyo Star Bank to Japanese buyout firm Advantage Partners LLC in December 2007, and less than four years later took control of the lender again with Shinsei, French lender Credit Agricole and Tokyo-based Aozora Bank Ltd. (8304)

Tokyo Star Bank was delisted from the Tokyo Stock Exchange in 2008 after the acquisition by Advantage. The bank, led by Chief Executive Officer Masaru Irie, had 1.53 trillion yen of loans outstanding as of March 31 with 31 branches and 1,256 employees, according to the company’s website.

To contact the reporters on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net; Monami Yui in Tokyo at myui1@bloomberg.net

To contact the editors responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net; Chitra Somayaji at csomayaji@bloomberg.net

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