E.Sun completes GDR

Taiwanese bank offloads remaining treasury shares.

E.Sun Financial Holding Co completed a $99 million GDR issue on Friday (September 24) through its house bank Morgan Stanley. The sale of the170 million shares disposes of the remainder of the group's Treasury stock created by the establishment of a holding company structure. A year ago, it sold a $160 million exchangeable backed by Treasury shares and also led by Morgan Stanley.

The current sale comprises 6.8 million GDR units at a price of $14.50. This represents a 3.75% discount to the stock's NT$19.4 close on Friday. One GDR equals 25 shares.

The deal represents 10% of the freefloat and 8% of the outstanding share capital. It was marketed on a discount range of 2% to 5% and books closed four-and-a-half times covered at the wide end of the range and three times covered at issue price.

A total of 50 investors participated of which about half were long only funds and half hedge funds. By geography, two thirds came from Asia and a third from Europe.

Year-to-date, the stock is up around 30%. On the day of pricing it was flat while the overall market was down 0.76%. Recent share price performance has been fuelled by an M&A buzz.

The group is rumoured to be buying Prudential's local mutual fund business, the fifth largest in Taiwan. The two already have a strategic alliance and Prudential owns about 5% of E.Sun's stock. Management, however, have denied that a sale is on the cards.

The group recently purchased bankrupt Kaohsiung Business bank in order to get hold of its branch licenses. As a result of the acquisition, it now has 114 branches, up from 54 previously.

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