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Chinatrust may raise more cash, mum on AIG Taiwan unit
2009-09-07
TAIPEI (Reuters) - Chinatrust Financial (2891.TW) said on Monday it was planning to raise more cash on top of a $1.34 billion private placement announced on Friday, but declined to comment on reports it had outbid rivals for AIG's (AIG.N) Taiwan unit. A source with direct knowledge of the deal told Reuters on Saturday that Chinatrust offered a larger-than-expected $2.4 billion for the Nan Shan Life unit, topping three rival bids. Deniel Wu, chief investment officer of Chinatrust, declined to comment on the size of its offer for Nan Shan, but said the company planned to raise money in addition to the private placement announced last Friday if it was selected as the buyer of the insurance unit. "GDRs and subordinated debt are things we can consider," Wu said, without giving more details. Chinatrust aimed to complete the placement of 2.5 billion shares at T$17.74 per share within four to six weeks, he added. Shares in Chinatrust hit a one-month intraday high on Monday on expectations its bid for Nan Shan would help expand its influence in the financial industry, although analysts said it risked overpaying. "If they really get to acquire Nan Shan, it will help expand Chinatrust's platform to insurance, especially the lucrative bank-insurance business," said Nora Hou, an analyst with Deutsche Securities. Chinatrust shares climbed as much as 4.66 percent to T$20.2, their highest intraday level since August 4, but pared gains to trade up 1.6 percent at T$19.60 at 0500 GMT. The shares outperformed the main index's (.TWII) 0.9 percent rise but underperformed the financial sub-index's (.TFNI) 2.2 percent advance. Analysts said Chinatrust shares could come under pressure because of its generous offer for Nan Shan. "The offer is way too high," said an analyst at a European securities house. ($1=T$32.86) (Reporting by Faith Hung; Editing by Jonathan Hopfner)
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