IBF Financial Holdings Co., Ltd.'s (TSEC:2889) board of directors approved a plan to enter acquisition negotiations with another company, despite two independent directors' objection, the firm said in a filing to the Taiwan Stock Exchange. IBF declined to comment on speculation that EnTie Commercial Bank Co., Ltd. (TSEC:2849) is its target, but said that it has signed a confidential memorandum of understanding with the targeted firm, IBF said. The Company Act stipulates that acquisition plans require approval by at least half of the attendees of a board meeting, in which at least half of the board members are present.

This suggests that at least seven of IBF's 13 board members supported the proposal. Independent directors Chen Wei-lung and Wu Ching-sung objected the plan, and independent directors Joseph Jao and Chen Shu-chuan voted in support, IBF said. The Securities and Exchange Act stipulates that a listed company must disclose when independent directors disapprove a acquisition proposal.

Wu criticized that IBF would fund the acquisition by cash and through the issuance of convertible preferred stocks, potentially affecting its financial structure, IBF said. There was no sufficient explanation why it is willing to pay a premium to acquire the other firm, the filing cited Wu as saying. However, the filing cited Jao as saying that IBF has a limited development potential if it does not acquire the other firm.