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Fubon Raises Offer to Convert Fubon Bank (HK) Into 100%-Owned Subsidiary

2011/03/17 | By Philip Liu

Taipei, March 17, 2011 (CENS)--To facilitate the transfer of 19.9% stake owned by Fubon Bank (Hong Kong) in Xiamen Bank to Taipei Fubon Bank, Fubon Financial Holding has decided to raise its offer to HK$5.2 (NT$19) per share, up from original HK$5, to buy up shares owned by the smaller shareholders of Fubon Bank (Hong Kong), thereby converting it into a 100%-owned subsidiary of Fubon Financial Group and delisting its shares from Hong Kong bourse.

The share buying-up plan will cost some NT$7.7 billion for the financial group, involving 25% of common shares and preferred shares. At HK$5.2, it represents a premium of 5.7% over the closing price of HK$4.92 of Fubon Bank on March 15. The transaction is scheduled for completion in the second quarter.

The maneuvering aims to facilitate expansion of Fubon Financial Group in the Chinese market, since Taipei Fubon Bank has much stronger financial wherewithal to support the expansion of Xiamen Bank. After opening its Chuanzhou branch, in Fujian Province, on March 14, Xiamen Bank has spent 90 million yuan (NT$400 billion) to purchase an office building in Chongqing to house its branch in the city, scheduled for inauguration in late April or early May.

Under the existing regulation, Taipei Fubon Bank cannot invest directly in China, since such investments can only be carried out by either the Taipei parent company or overseas subsidiary bank, but not both simultaneously.