HSBC Holdings announced a conditional proposal to privatize Hang Seng Bank, a banking institution in Hong Kong. As the controlling shareholder, HSBC holds approximately 63% of Hang Seng’s shares and is looking to implement privatization.
If the proposal is approved, Hang Seng Bank will transition into a wholly owned subsidiary of HSBC Asia Pacific and will be removed from the Hong Kong Stock Exchange. This strategic move is part of HSBC’s plan to enhance its leadership and market share in sectors where it has clear competitive advantages and opportunities for growth.
The proposed privatization, valued at HK$106 billion ($13.6 billion), places the total equity value of Hang Seng at HK$290 billion ($37.27 billion). HSBC’s offer includes HK$155 for each Scheme Share, representing a 33% premium over the undisturbed 30-day average closing price of HK$116.5 per share.
The proposal is contingent upon the approval of Hang Seng’s shareholders, as well as the sanctioning by the High Court of Hong Kong.
KEY QUOTES:
“Our offer is an exciting opportunity to grow both Hang Seng and HSBC. We will preserve Hang Seng’s brand, heritage, distinct customer proposition and a branch network, while investing to unlock new strengths in products, services, and technology to deliver more choice and innovation for customers.”
“Our offer also represents a significant investment into Hong Kong’s economy, underscoring our confidence in this market and commitment to its future as a leading global financial centre, and as a super-connector between international markets and mainland China.”
“This proposal fully meets our criteria for value-accretive investments: it aligns with our strategy, enhances growth and scale, does not distract us from organic growth, and delivers greater shareholder value than buybacks.”
“Together, HSBC and Hang Seng form a well-positioned platform with two iconic banking brands working side by side to deliver lasting value for customers, employees, and shareholders.”
Georges Elhedery, HSBC’s Group CEO
