Carlyle plan to sell Ta Chong to Yuanta fails

The smaller bank's share price fell by the maximum 6.8% allowed following the news, while Yuanta's shares were down 0.39%.

Local media blamed the collapse of the deal on a failure to agree over the share swap ratio and the recent decline in the Taiwan stock market. The main TAIEX index opened down 0.12% on Friday morning.

Carlyle and the Chen family - which owns about 30% - were intending to sell Ta Chong in a share swap that would value their equity at T$15-17 per share and give the private equity giant a 7% stake in Yuanta.

Carlyle purchased 35% of Ta Chong for NT$21.5 billion ($729 million) in 2007. It has employed J.P. Morgan and Barclays to run the sales process for the asset, and last month was trying to persuade the other shareholders to offload their shares in order to sell a majority stake.

Yuanta's exit from the proceedings could bring about fresh interest from another contender, Fubon Financial, which in March 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
• Exit
• Financial Services
• Taiwan (China)