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Development Fund (2883-TW) announced today (27) that it intends to publicly acquire a 21.13% stake (one billion shares) of China Life (2823-TW) at 23.6 yuan per share, with a total planned investment of 23.6 billion yuan. Vice President Zhang Liquan said the source of the funds will be the combined support of the development capital of the subsidiaries and the reduction of capital, debt and equity of KGI. After the acquisition is complete, the stake in China Life will exceed 55%, but the 100% acquisition is still a long term. The ultimate goal.
In 2017, the Development Fund acquired a 25% stake in China Life at a price of around 35 yuan per share. Together with the original investment of almost 10%, the Development Fund owns 34.82% of China Life. Zhang Liquan said that considering the current market and his own financial situation, the decision will be made public. 1,000 million shares and 21.13% of the capital stock were acquired. If the number of acquisitions foreseen in this public acquisition is achieved, the comprehensive participation rate will reach 55.95%.
Since the acquisition will be completed this time, it will cost 23.6 billion yuan. Zhang Liquan said that development capital and KGI Securities have each reduced their capital by 1.5 billion yuan. The development fund also issued 10 billion yuan ordinary unsecured corporate bonds at the end of September, plus the company’s own funds, under the premise of a stable financial structure, the three sources of funds mentioned above will be used to support the acquisition of China Life, and the subsequent sale of the headquarters building will also be considered in the overall fund utilization plan.
Zhang Liquan further noted that there is no specific person to be sold in the public acquisition, but if the sale exceeds the limit of one billion shares, it will be distributed proportionally.
Zhang Liquan said that since the development of China Life as a subsidiary in September 2017, it has officially become a financial holding company with four profitable platforms for life insurance, commercial banking, securities and venture capital / private equity. In recent years, China Life Excellence performance contributes to development fund profit contribution, capital use efficiency and equity capital performance; If the participation index increases to more than half the participation, it will be more useful for the recognition of gains and losses and the control of control rights. In addition, in the future, the subsidiaries of Development Financial Holdings will carry out more comprehensive cooperation to strengthen the synergy of the group’s operations, accelerate the promotion of digitization, and further establish the leadership position of Development Financial Holdings in corporate sustainability. (IS G).
Regarding the M&A follow-up plan, Zhang Liquan said that the progress of the China Life acquisition will continue to be carried out in accordance with the above requirements of the Financial Management Committee, and will continue to periodically report to the competent authority. This time, more than half of the capital will be exceeded. The future 100% acquisition remains the ultimate long-term goal.
Initially, the Development Fund planned to complete the acquisition of 100% of the shares of China Life by the end of 2020. However, due to the price gap in the acquisition, the Development Fund requested the FSC to extend the deadline for the acquisition. from China Life. After FSC agreed, it could be postponed until 2022. June 13 Term of Japanese board ends.
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