(Bloomberg) -- Taiwan's Fubon Financial Holding Co.'s plan to sell its Hong Kong banking business is stalling as protests in the city hamper talks and undermine the unit's valuation, according to people with knowledge of the matter.
Negotiations with potential buyers, mostly from mainland China, have slowed in recent months and it will probably take longer to reach a deal, the people said, asking not to be named because the talks are confidential. Twenty-one straight weekends of protests are giving companies pause on potential investments in Hong Kong, the people said.
The unit's assets were valued at $2 billion to $3 billion when Bloomberg reported last year that Fubon was gauging interest from buyers. Fubon operates 20 branches and a securities services center in Hong Kong, according to its website.
Demonstrations led by Hong Kong pro-democracy activists have lasted almost five months, turning increasingly violent recently with two protesters shot and a police officer slashed. The protests have spawned damage in the streets and have sometimes targeted certain shops and Chinese bank branches. That's hurt tourism, retail sales and put the city on the verge of a technical recession.
Still, the sale process hasn't officially been shelved. Both Fubon and potential buyers remain interested in reaching an agreement, the people said. A representative for Taipei-based Fubon said they do not comment on market speculation.
Fubon had total assets of $261 billion, making it Taiwan's second-largest financial holding company, according to its website. It also has sought to expand its presence in Greater China. It holds almost 20% of Xiamen Bank Co.
Shares of Fubon Financial fell as much as 0.8% in early trading on Thursday in Taipei.
--With assistance from Cindy Wang.
To contact the reporter on this story: Manuel Baigorri in Hong Kong at mbaigorri@bloomberg.net
To contact the editors responsible for this story: Fion Li at fli59@bloomberg.net, David Scheer
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