HSBC (0005) is seeking shareholders’ approval on its HK$106 billion proposal to privatize Hang Seng Bank (0011) at a court meeting and a general meeting on Thursday.
The move requires at least 75 percent of Hang Seng independent shareholders’ approval, with no more than 10 percent objection at the court meeting. It also needs to gain 75 percent of shareholders’ support at the general meeting.
The results are expected to be announced later today. If approved, the privatization scheme is expected to become effective on January 26, with the last trading day being January 14.
The lender’s shares would be removed from major indexes, including the Hang Seng Index, from January 15.
HSBC offered HK$155 per share to buy out the 36.5 percent of Hang Seng shares it does not already own via a scheme of arrangement.
The offer price represents a premium of about 33.1 percent to Hang Seng Bank’s average closing price over the 30 trading days prior to October 8, the last trading day before the joint announcement, and a premium of about 30.3 percent to its closing price on that day.
Founded in 1933, Hang Seng is one of Hong Kong's largest banks and a principal member of the HSBC group. It serves about 4 million customers through digital platforms and more than 250 branches across the city, according to its website.
Hang Seng Bank has been under pressure in recent years due to its relatively high exposure to the Hong Kong and mainland Chinese property markets.
Debt-laden property developers in Hong Kong and their creditors are set to face intensifying financial pressure as bond maturities are slated to jump by nearly 70 percent next year.
Staff reporter and Reuters
