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HSBC HOLDINGS Plans 30.3% Premium Privatization of HANG SENG BANK; No Buybacks Expected for Next 3 Quarters
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HSBC HOLDINGS (00005.HK) announced that HSBC Asia Pacific had put forward the Proposal for the privatisation of HANG SENG BANK (00011.HK) by way of a scheme of arrangement. If the Scheme becomes effective, the Scheme Shares will be cancelled in consideration for the Scheme Consideration of HK$155 in cash for every Scheme Share held, being a premium of approximately 30.3% over the closing price of HK$119 per Hang Seng Bank Share as quoted on the Hong Kong Stock Exchange on the Last Trading Day (8th). The Proposal values the entire issued share capital of Hang Seng Bank at approximately HK$290.305 billion; and a cash payment in the aggregate amount of HK$106.156 billion will be paid by HSBC Asia Pacific to the Scheme Shareholders under the Proposal. This is an implied P/B (price-to-book) multiple significantly above Hong Kong Comparable Peers: implied 1H25A P/B 1.8x vs. Hong Kong Comparable Peers median. Hang Seng Bank Shareholders will receive the 2025 Third Interim Dividend which will not be deducted from the Scheme Consideration. All other dividends declared by Hang Seng Bank after today (9th) with a record date before the Scheme Effective Date will be deducted from the Scheme Consideration. Hang Seng Bank has been rooted in Hong Kong for close to 100 years and has a distinctive legacy. HSBC intends to continue to respect the legacy of Hang Seng Bank and to serve Hong Kong through both the HSBC and Hang Seng Bank brands. As such, Hang Seng Bank will retain its separate authorization as a licensed bank under the Hong Kong Banking Ordinance with its own governance, brand, distinct customer proposition and a branch network. HSBC expects to restore its CET1 ratio to its target operating range of 14%-14.5% through a combination of organic capital generation and not initiating any further buybacks for three quarters following the date of this announcement. A decision to recommence buybacks will be subject to HSBC’s normal buyback considerations and process on a quarterly basis. AASTOCKS Financial News Website: www.aastocks.com |
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