Reuters: Private Equity: Carlyle plans $1.25 bln Taiwan bank sale to Yuanta-sources

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Carlyle plans $1.25 bln Taiwan bank sale to Yuanta-sources May 18th 2012, 03:48 TAIPEI | Thu May 17, 2012 11:48pm EDT TAIPEI May 18 (Reuters) - Private equity firm Carlyle Group and other major shareholders of Taiwan's Ta Chong Bank plan to sell the bank to Yuanta Financial in a deal worth up to T$37 billion ($1.25 billion), two sources familiar with the situation said on Friday. Carlyle and the Chen family, which together hold about 70 percent of Ta Chong, would sell their stakes in a share swap that values their holdings at T$17 per share, said one of the sources. Another source said the price was at T$15. Both sources declined to be identified due to the sensitivity of the matter. Carlyle had bought a 35 percent stake in Ta Chong in 2007 for NT$21.5 billion ($729 million), part of a wave of private equity investments targetting a rebuilding of Taiwan's financial sector after a consumer lending crisis beginning in 2005. But sources told Reuters in April that Carlyle had hired J.P. Morgan to sell its now around 40 percent stake in the bank, and had been trying to enlist other shareholders in order to sell a controlling stake. The company was looking to exit a competitive and fragmented Taiwan market where only slow progress had been made in developing potentially lucrative banking ties with China, and which had never produced the returns investors such as Carlyle had sought. "Most of the terms have been settled," said one of the sources. "The only things left to be worked out are Carlyle's financing needs and arranging a position for Ta Chong's chairman in the merged company." The share swap would give Carlyle a 7 percent stake in Yuanta, said the source. The other source said that the companies would announce the deal as soon as late this month. Ta Chong's market capitalisation stood at about T$24 billion as of Thursday's close. Its shares fell 2.27 percent to T$10.75 in midday trading on Friday, about the same as the broader market. A T$17 per share offer would value the bank at T$37.1 billion. Officials of Carlyle and Yuanta declined to comment. Ta Chong's spokesman said that he is not aware of the share sale. J.P. Morgan and Barclays are advising Carlyle, while Morgan Stanley is advising Yuanta, said the source. Local media have previously reported that Fubon Financial and Yuanta were interested in buying Ta Chong. Link this Share this Digg this Email Reprints

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