Taishin Financial’s share price soared 14% on the first day after the announcement of its link-up with Asian private equity firm Newbridge Capital, and gave a shot in the arm to Taiwan’s banking sector. Finally, it seemed, someone wanted to invest in a Taiwanese bank.
Newbridge’s investment amounts to NT$27 billion (US$836 million), split into three parts: common shares (30% of the total), convertible preferred shares (44%) and convertible bonds (26%). All three types of instruments have a mandatory lock-up period of three years.
“We have been looking at the Taiwanese banking sector for years and waiting for a good opportunity to arise,” says Weijian Shan, co-managing partner at Newbridge Capital in Hong Kong. “Taishin is a financial holding company with a good franchise and very strong potential for further growth.”
He says part of the reason for not taking management control but only a strategic stake is the very strong management team. For Taishin, the benefits of the tie-up include the capital injection, Newbridge’s experience and contacts in the region, especially possibilities in China.
“We consider Newbridge Capital a long-term partner that will provide strategic benefits and unique management insights to Taishin as the company expands in Taiwan, and in Asia including China, Hong Kong, Japan, Korea, India, Australia and southeast Asia,” says Carol Lai, chief financial officer at Taishin Financial in Taipei.