Singapore’s Oversea-Chinese Banking Corp (OCBC) says it has offered to buy Hong Kong’s Wing Hang Bank for $US4.
95 billion ($A5.35 billion) as it seeks to boost its presence in the giant Chinese market.
OCBC said in a statement on Tuesday it had made the “pre-conditional voluntary general offer” to acquire Wing Hang through its wholly owned subsidiary OCBC Pearl Limited.
OCBC offered to buy each Wing Hang share at HK$125, or a total of HK$38.43 billion “in cash”.
The Singapore bank said it has “sufficient financial resources” to finance the deal.
The offer price gives a 1.6 per cent premium to Wing Hang shares as of their last closing price of HK$123, and about 67.3 per cent over the 90-day average price, OCBC said in a statement to the Singapore stock exchange.
OCBC said the acquisition would strengthen its “strategic goal of deepening its presence in its four core markets – Singapore, Malaysia, Indonesia and the greater China region” comprised of the mainland, Hong Kong, Macau and Taiwan.
It said the offer was “subject to certain pre-conditions being satisfied, including the obtaining of regulatory approvals”.
OCBC said it has received “irrevocable undertakings” to accept its offer from key shareholders, including the Fung family and BNY International Financing Corp who hold an aggregate 44.79 per cent of Wing Hang shares.
Other shareholders holding a total 3.37 per cent of Wing Hang have also agreed to accept the offer.
OCBC’s wholly owned subsidiary OCBC Bank (China) Ltd has 16 branches and sub-branches on the mainland.
OCBC also has a branch in Hong Kong and another in Taiwan, while its private banking subsidiary, Bank of Singapore, has a branch in Hong Kong.
Wing Hang has a network of 70 branches in Hong Kong, Macau and China.
“Its expertise in secured and unsecured small and medium enterprises banking in greater China will complement OCBC China’s current focus on corporate banking, and should increase overall asset yield,” OCBC said.
OCBC chief executive Samuel Tsien said the offer to acquire Wing Hang “is a strategic component of our greater China strategy”.
Wing Hang chairman Patrick Fung described OCBC as “the best partner to further grow the Wing Hang business in Hong Kong and the greater China region in the future”.
OCBC shares were trading at Sg$9.60 mid-morning Tuesday, up 0.95 per cent after a trading halt imposed on Friday was lifted.