Taiwan's Waterland plan to buy King's Town Bank hit snag-sources

TAIPEI Thu Feb 13, 2014 12:14am EST

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TAIPEI Feb 13 (Reuters) - Plans by Taiwan's Waterland Financial Holdings Co to acquire domestic lender King's Town Bank have hit a snag over the estimated $1.2 billion price tag, two people with direct knowledge of the matter said on Thursday.

Waterland Financial, partly owned by the Taiwan government, has previously said it wants to buy King's Town Bank. The sources said Waterland's board would meet next month to discuss the plan.

Waterland has proposed offering King's Town Bank T$31 ($1) a share, but the government is concerned that this price is too high, the sources said. The lender has 1.2 billion outstanding shares.

The government is also worried that its position on Waterland's board may be diluted if the company decides to issue new shares to finance the purchase, the sources said.

The sources declined to be identified as the matter is not yet public. Officials at both Waterland Financial and King's Town Bank were not immediately available to comment.

Taiwan's government is encouraging consolidation in the crowded banking sector to ease stiff competition.

This week, China Development Financial Holding said it would acquire Taiwanese lender Cosmos Bank for about $760 million.

(Reporting by Emily Chan; Writing by Faith Hung; Editing by Miral Fahmy)

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