Bloomberg News

Chinatrust Said to Seek Deal for Tokyo Star Bank in June

April 09, 2013

Taiwan’s Chinatrust (2891) Financial Holding Co. is seeking to acquire Tokyo Star Bank Ltd. for about 50 billion yen ($503 million) in a deal that may be struck as soon as June, according to two people with knowledge of the matter.

Chinatrust is in talks to buy closely held Tokyo Star from a group of shareholders including Dallas-based Lone Star Funds, Shinsei Bank Ltd. (8303) and Aozora Bank Ltd. (8304), the people said, asking not to be identified as the information is private.

A takeover would be the first of a Japanese bank by a foreign lender, helping Chinatrust to serve as a bridge between corporate customers in Taiwan and the world’s third-largest economy, the person said. Japan’s Topix Banks Index up 70 percent in the past six months as investors bet that fiscal and monetary stimulus will spur borrowing.

Spokesmen for Taipei-based Chinatrust, Lone Star, Shinsei Bank and Aozora Bank declined to comment on a potential deal. Hiroki Nakano, a spokesman for Tokyo Star, said the company isn’t in position to comment on the matter.

Any deal would require regulatory approvals from authorities in Taiwan and Japan, one person said. The Nikkei newspaper reported in January that Chinatrust was in talks to acquire the Japanese bank.

Fourth Sale

Chinatrust, Taiwan’s largest issuer of credit cards, is considering the purchase with Japan’s property market expected to benefit from Prime Minister Shinzo Abe’s efforts to put an end to decades of deflation. Tokyo Star focuses on mortgages in addition to its corporate lending business in industries such as health care and shipping.

Tokyo’s apartment supply this year will reach the highest level since 2007 because of an expectation of economic recovery after Abe was elected in December, according to an estimate by Real Estate Economic Institute Co. published on Dec. 20.

The sale would be the fourth time ownership of Tokyo Star has changed hands since 1999, when the lender was bailed out by Japan’s government.

Funds run by Lone Star bought the bank after the bailout in the wake of the Asian financial crisis, according to the bank’s website. Japanese buyout firm Advantage Partners LLC then bought the bank from Lone Star in 2008, before a Lone Star-led group bought it back in 2011.

Tokyo Star was delisted from the Tokyo Stock Exchange in 2008 after the acquisition by Advantage. The bank led by Chief Executive Officer Masaru Irie had 1.57 trillion yen of lending outstanding as of March 2012 with its 31 branches and 1,200 employees, according to the company’s website.

Jeffrey Koo, founder of Chinatrust died in December. Koo served as adviser to three Taiwan presidents -- Lee Teng-hui, Chen Shui-bian and Ma Ying-jeou -- advocating for closer economic cooperation with China.

To contact the reporters on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net; Monami Yui in Tokyo at myui1@bloomberg.net; Shingo Kawamoto in 東京 at skawamoto2@bloomberg.net

To contact the editors responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net; Chitra Somayaji at csomayaji@bloomberg.net


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