Surge in KGI Securities shares boosts stocks on local exchange
The China Post news staff
April 7, 2012, 12:09 am TWN
The China Post news staff--The share price of KGI Securities Co. jumped to NT$12.15 on an acquisition move from China Development Financial Holding Corp.
China Development offered 1.2 of its own shares plus NT$5.5 in cash for each share of KGI Securities, the nation's second-largest brokerage, valuing the transaction at NT$16.71 per share, representing a premium of 32.7 percent.
Investors placed orders for a hefty volume of 700 million shares of KGI Securities right after the opening bell, temporary jamming the electronic trading system of the Taiwan Stock Exchange.
It cost China Development as much as NT$54.6 billion in cash and stock to acquire KGI Securities as its newest affiliate.
China Development's own stock price also advanced 4.7 percent to NT$8.74 per share, showing investors generally back its move to acquire KGI Securities,
Executives at China Development that they will make further consolidations to turn KGI Securities a wholly owned subsidiary.
In addition, the business operations of KGI Securities and the group's Grand Cathay Securities will be integrated to beef up market competitiveness and dominate the underwriting business in Taiwan.
The integration of the two securities brokerage firms is scheduled for completion in 2013.