Carlyle to sell Ta Chong for $1.25b - report

Sources told Reuters that the private equity giant and the Chen family - which owns about 30% - intend to sell the Ta Chong in a share swap that would value their equity at T$15-17 per share. Carlyle would get a 7% stake in Yuanta through the deal, which could be announced later this month. Ta Chong's spokesperson claimed he was not aware of the sale.

Carlyle has employed J.P. Morgan and Barclays to run the sale, and last month was trying to persuade the other shareholders to offload their shares in order to sell a majority stake. Morgan Stanley is advising Yuanta.

"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."

Carlyle purchased 35% of Ta Chong for NT$21.5 billion ($729 million) in 2007.

Ta Chong's market capitalisation was around T$24 billion as of Thursday's close. It shares rose by the maximum 7% allowed in a session on Friday, closing at T$11.75.

In March, Fubon Financial announced plans to acquire a bank to expand its presence in southern Taiwan, prompting speculation that Ta Chong was the target. "Our weakness from lacking many branches in central and southern Taiwan could be strengthened by Ta Chong," Victor Kung, president of Fubon, said at the time.

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• Topics
• Exits
• Financials
• Greater China
• The Carlyle Group
• Financial Services
• Taiwan (China)