Yuanta Financial Holding Co. will acquire Ta Chong Bank Ltd., a Taiwanese lender backed by Carlyle Group LP in a deal valued at about NT$56.6 billion ($1.7 billion).
Yuanta will pay in cash and stock, as well as purchase NT$14.5 billion of overseas convertible debentures, the Taipei-based company said in a presentation on Thursday. The cash and stock component values Ta Chong shares at NT$16.30 each, or 31 percent above the stock’s close earlier in the day.
“Yuanta, now a securities-focused financial firm, will expand its presence in banking via the acquisition,” Vincent Chen, a Yuanta spokesman, said at a briefing. The bank is “aiming for the deal to close after the Lunar New Year next year,” he said.
Purchasing Ta Chong would give Yuanta more than 60 branches in Taiwan to add to the financial services company’s 88 banking outlets, according to their websites. The sale would allow Carlyle, the Washington-based private-equity firm, to exit its investment in a bank that reported net income declines in two of the past three calendar years.
Carlyle’s Chung Hsi Co. unit owned 17.2 percent of Ta Chong as of June, data compiled by Bloomberg show. The U.S. firm and a partner invested NT$21.5 billion in the Taiwanese lender in 2007.
Tammy Li, a Hong Kong-based Carlyle spokeswoman, declined to comment in an e-mail on Yuanta Financial’s takeover offer. The deal would mark the first acquisition of a Taiwanese bank valued at a billion dollars or more since 2011, data compiled by Bloomberg show.
Yuanta Financial, the product of a 2007 merger between Fuhwa Financial Holding Co. and Yuanta Core Pacific Securities, has looked at Ta Chong before.
The firm and Fubon Financial Holding Co. had stopped assessing prospects for a merger, Ta Chong said in May 2012, amid reports at the time that the parties couldn’t agree on a share-swap ratio.