Taiwan's Chinatrust to Buy Tokyo Star Bank

The Nikkei reported that Taiwan's Chinatrust Commercial Bank made an official proposal to acquire Tokyo Star Bank to shareholders for JPY 50 billion (USD 555 million) earlier in the month. Most of the shareholders - including U.S. investment fund Lone Star Funds, Shinsei Bank and France's Credit Agricole SA - are believed to have indicated their support for the bid.

Pending a final agreement with shareholders, the deal will be reviewed by the Financial Services Agency. The FSA will check whether the Taiwanese bank meets necessary ownership conditions under the Banking Act. The deal will make Chinatrust the first foreign bank to acquire a Japanese bank. Previous foreign takeovers of Japanese banks mainly involved investment funds.

Tokyo Star Bank was previously owned by Lone Star, who bought its predecessor Tokyo Sowa Bank in 2001. Loan Star listed the regional bank on Tokyo Stock Exchange in 2005, and subsequently sold its remaining holdings to Advantage Partners. Advantage bought 100% of the bank through take-private TOB in early 2008. In 2011 Advantage was forced to transfer the bank's entire shares to the lender consortium, which included Loan Star and other current shareholders.