Ting Hsin is largest Taipei 101 shareholder
The China Post news staff
July 17, 2009, 10:15 am TWN
TAIPEI, Taiwan -- Ting Hsin Group, a leading Taiwanese-invested food conglomerate in China, has sent shock waves through Taiwan's realty market by demonstrating its ambition to acquire over 50-percent stake in Taipei 101 and invest in other major commercial properties in the metropolitan city.
Just 10 days ago, the group, famous for making big fortunes in mainland China by Master Kong-branded instant noodles, successfully acquired all the 19.55 percent stake owned by China Development Industrial Bank in Taipei 101, making it the largest private shareholder of the property.
The stake was sold to Ting Chi Development Co., a holding firm owned by Wei Yingjiao, chairman of Ting Hsin Group, and his other three brothers, at NT$3.735 billion or NT$13 per share, representing a 60-percent markup over the book value of Taipei 101, or NT$8 per share.
Two days ago, Ting Hsin again spent NT$481 million to get an additional 2.5 percent stake in Taipei 101. The group purchased the stake from China Life Insurance also at NT$13 per share, making the latter rake in NT$110 million in net profit from the deal.
Both deals boost Ting Hsin's stake in Taipei 101 to 22 percent, further consolidating the status of Ting Hsin as the largest shareholder of the world's tallest building. The second largest shareholder is Resolution Trust Fund with 15.12 percent, and the third is state-run Chunghwa Telecom with 11.76%.
In addition, the 22-percent shareholding will help Ting Hsin to snatch three seats in the board of directors of the Taipei 101 during the re-election of the board members in September.
Insiders pointed out that Ting Hsin may further boost its stake by acquiring the 3.06% shareholding owned by Chinatrust Bank. Even with the addition of the stake, it will still not be able to threaten the dominance of Taipei 101's management by the government, which in total boasts 44% stake. In addition to the Resolution Trust Fund and Chunghwa, Taiwan Stock Exchange and state-run Mega Bank are also major shareholders of the property.
A top official of the Ting Hsin decided to buy into Taipei 101 mainly because of its status as the world's largest building and as the first choice for office by Chinese investors, making it the hallmark of Taiwan's commercial property market.
The aforementioned deals indicate the realization of Ting Hsin's plan to venture into Taiwan's commercial property market, and the group may set up its Taiwan headquarters in Taipei 101.
Wei Yingzhou, the eldest of the four brothers founding the Ting Hsin Group and now chairman of Master Kong Holding Co. in China, said that based on the "salmon returning home" spirit, the brothers will continue to invest in Taiwan.
Wei said if Ting Hsin invests over NT$10 billion in Taipei 101, the group is likely to obtain over 50 percent of all the stakes of Taipei 101. The group will seek to acquire more stakes owned by other private shareholders in the property, at a maximum price of NT$13 per share.
Although the largest shareholder in Taipei 101, Wei said that Ting Hsin will fully support the existing management team and support chairman designated by government-linked shareholders.
Besides Taipei 101, Ting Hsi is reportedly to invest at least NT$50 billion in commercial properties, mainly in Xinyi District, Neihu District, and Dunbei-Minsheng commercial area.
The four brothers of the Wei family started out their business in the central Taiwan city of Changhwa as edible oil, and later made big fortunes in mainland China by selling Master Kang-branded instant noodle. The group raked in profits of US$360 million in 2008 from sales of Master Kong instant noodles.