Taishin says to seek support from Taiwan government to merge with Changhwa
TAIPEI (Reuters) - The board of Taishin Financial (2887.TW) will seek support from the finance ministry for a merger with Changhwa Bank (2801.TW), Taishin said on Wednesday.
It said Changhwa Bank would be the surviving entity, a change from the original plan discussed in 2005. The finance ministry is Changhwa's second largest shareholder.
"We talked to the finance ministry before the Chinese new year; we will continue to communicate with the ministry," Taishin President Joseph Jao told reporters.
Shares of Taishin Financial and Changhwa Bank surged to their highest since August 2011 on Wednesday after the Commerical Times reported that a revised merger plan would be discussed as soon as later in the day. The deal has been stalled for more than six years.
Taishin paid T$36.6 billion ($1.24 billion) to become Changhwa's biggest shareholder in 2005.
Taishin has faced public opposition over merging with state-run Changhwa on concern that the stake of Changhwa was sold to Taishin below fair prices. Global private equity fund Newbridge Capital NB.UL cut its stake in Taishin last year in part because it was disappointed the merger could not succeed.
If completed, the merger would make the new entity Taiwan's third-biggest bank by assets, with T$2.72 trillion ($92.2 billion).
Shares of Taishin and Changhwa closed up 3.7 percent and 3.6 percent, respectively. The broader market .TWII climbed 0.9 percent.
(Reporting by Faith Hung; Writing by Clare Jim; Editing by Sanjeev Miglani)