March 8, 2007 / 4:56 AM / 10 years ago

Citigroup to acquire Taiwan bank "very soon"

3 Min Read

<p>People walk past a Citibank branch in Shanghai November 16, 2006. Citigroup will buy Taiwan's Bank of Overseas Chinese (BOOC) "very soon", an executive of the Taiwan lender said on Thursday, in a deal media said would be worth US$425 million.Aly Song</p>

TAIPEI (Reuters) - Citigroup will buy Taiwan's Bank of Overseas Chinese (BOOC) "very soon", an executive of the Taiwan lender said on Thursday, in a deal media said would be worth US$425 million.

"Both parties have been in intensive talks in the last few days. You should hear good news about us very soon," said a BOOC executive, who asked not to be identified.

The news boosted BOOC stock by 2.71 percent to a four-month high around 0430GMT, outpacing a 0.84 percent gain for the main stock index and a 0.54 percent rise for the financial sub-index.

Citi has been in talks with BOOC, a small player in Taiwan -- Asia's No. 4 banking market -- since last summer about a possible merger. Pressure on Citi has heated up since Standard Chartered in September agreed to buy Taiwan's Hsinchu International Bank for US$1.2 billion.

"Citi's move sends a positive signal on Taiwan's banking sector, because it indicates Taiwan is a market filled with some good opportunities," said John Kuo, who manages T$8 billion (US$242 million) for Fuh Hwa Securities Investment Trust.

Many global lenders are raising their hopes on the Taiwan market as a platform to increase their influence in China, the neighboring giant, some analysts said.

A consumer credit crisis, which pulled down stock prices of Taiwan's financial firms, also offered values for foreign banks and investors.

The BOOC executive declined to confirm a report published by the Wall Street Journal on Thursday, which said Citi would pay T$11.60-T$11.80 a share in an all-cash deal.

"The pricing is not final yet. Our board has not voted on that one," he said, adding that no tentative board meeting has been scheduled anytime soon.

Morris Li, country manager of Citigroup in Taiwan, also declined to comment on the report.

News of the talks first appeared last year, with reports emerging several times that a deal was close. In the latest of those, Taiwan media reported in last month that the two sides had reached a breakthrough in their talks, in a deal that would be valued at about US$430 million.

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