CDF denies any deals after rumors fuel stock surge
By John Liu, The China Post
December 11, 2013, 12:30 am TWN
TAIPEI, Taiwan -- China Development Financial (CDF, 開發金) yesterday denied that an acquisition deal and a joint venture are in the works.
It was recently reported in the media that CDF is to acquire Cosmos Bank at the price of NT$17 per share by the end of this year, and that CDF's subsidiary KGI Securities (凱基證券) is to form a security firm with Alibaba Group, the largest e-commerce company in mainland China.
CDF announced yesterday that both pieces of news were “pure speculation by the media.”
Nevertheless, stock prices of Cosmos Bank surged to NT$15.85 yesterday, thanks to the acquisition news, and CDF's share prices also rose 2 percent, going as high as NT$8.9 per share.
It was reported in a local media that CDF and Cosmos Bank had agreed on the acquisition price, and CDF was to acquire Cosmos Bank's shares at a factor between 1.5 and 2, like it did with KGI. The acquisition is reportedly to be made with both cash and share swaps. The local new source said CDF would “purchase at NT$17 per share, the total cost amounted to less than NT$20 billion, and the deal would be sealed before the Chinese New Year at the earliest.”
The acquisition news has been circled for more than one year, and some speculated that the news might be made up in order to boost stock prices.
The news report also said that CDF has notified the Financial Supervisory Commission of its acquisition plan, and intends to resolve all issues in less than three years. Cosmos Bank said it would not comment on the news report.