HSBC has proposed a HK$106 billion plan to privatize Hang Seng Bank, with the aim of taking full ownership of the lender in Hong Kong through a scheme of arrangement.
HSBC currently owns about 63% of Hang Seng’s shares and plans to acquire the remaining shares at HK$155 per share, representing a 33% premium over the bank’s 30-day average price of HK$116.50.
If approved, Hang Seng will become a wholly-owned subsidiary of HSBC in the Asia Pacific region and will be delisted from the Hong Kong Stock Exchange.
“Our offer represents an exciting opportunity to grow both Hang Seng and HSBC,” said George Al Hadiri, HSBC Group CEO.
“We will preserve the Hang Seng brand, heritage, differentiated customer offerings and branch network, while investing to unleash new strengths in products, services and technology to deliver more choice and innovation to customers.”
Al Hudayri said the proposal is in line with HSBC’s strategy to strengthen its leadership in key growth markets and reflects its long-term commitment to Hong Kong as a global financial center and gateway to mainland China.
The deal will require Hang Seng shareholder approval and sanction from the Hong Kong High Court.
If successful, HSBC said the integration will strengthen its presence in Hong Kong and create greater value for customers and shareholders alike.