NT$20 per share for Grand Cathay, and a can of worms thrown in . . ....03.30.2001-Primasia News-Taiwan

Primasia News, Taiwan

03.30.2001
NT$20 per share for Grand Cathay, and a can of worms thrown in . . .

China Development and Industrial Bank (CDIB, 2804 'Kai Fa') announced yesterday a target price of NT$20 per share on the acquisition of Grand Cathay Securities Co. (6003 'Da Hua Zheng'), a 13.6% premium over yesterday's closing price.
CDIB needs to acquire, between April 11 and 20, 200m shares of Grand Cathay to gain control of the company. If it cannot pick up sufficient shares within this period, it will fail to gain control.
As the major shareholders in Grand Cathay are KMT old school, they are not enthusiastic about releasing shareholdings to CDIB. These shareholders are also permitted to acquire Grand Cathay shares by raising a counter-offer. However, they have refused to confirm whether they will adopt this approach.
Grand Cathay's share price has risen 43.7% over the last seven days, prompting the Securities and Futures Commission to investigate the case. As we anticipate more M&A in the banking and finance industry after the financial holding company law is enacted around June, we would advise investors to beware of similarly shady M&A maneuverings and insider slights of hand.