Wednesday, July 30, 2014

OCBC rises most since April as $6.2 bil Wing Hang bid accepted

Oversea-Chinese Banking Corp. shares climbed the most in three months as it prepares to take Wing Hang Bank private after shareholders accepted its US$5 billion ($6.2 billion) takeover.

OCBC said it will delist Wing Hang after its stake in the Hong Kong bank rose to 97.52%, according to a statement made to the Singapore stock exchange yesterday, the last day of the offer. Hong Kong takeover rules required OCBC, Southeast Asia’s second-largest lender, to own at least 90% of Wing Hang’s shares before the target could be delisted..

OCBC is buying Wing Hang as it seeks more access to the Greater China region, allowing it to offer banking services to Chinese companies expanding in Southeast Asia. Samuel Tsien, the acquirer’s CEO, said earlier this month his bank intends to tap the owners of Wing Hang’s corporate clients, mainly small and medium-sized companies, for the Singaporean lender’s private- banking business.

“The urgent need will be to determine a sustainable strategy in such a competitive market, including being clear quickly on what business segments and areas to focus on,” Kevin Kwek, a Sanford C. Bernstein & Co. analyst based in Singapore, wrote in a note to clients yesterday. “There is pressure for management to show the deal is worth it.”

Shares of OCBC rose 1.8% to $9.94 as of 9:26 a.m. in Singapore, the biggest intraday gain since April 30. Wing Hang was suspended today in Hong Kong, where the stock closed at HK$121.80 ($19.52) yesterday.

Acceptances for the bid dragged earlier this month as hedge fund Elliott Capital Advisors LP boosted its stake in Wing Hang to 7.8%, which Mizuho Securities Asiasaid at the time could put pressure on OCBC to raise its HK$125 per-share bid price.

No comments:

Post a Comment