SINGAPORE/HONG KONG: The death of the largest single shareholder of Standard Chartered Plc is rekindling speculation the Asia-focused British bank has become a takeover target.
“If you say you want to expand in Asia or emerging markets, (Standard Chartered) has a very unique footprint, not replicable in many places,” said Anthony Lok, an analyst at BOC International in Hong Kong, on Monday.
Standard Chartered is based in London but makes most of its money in Asia, particularly in Hong Kong.
The bank, which currently has a market value of nearly US$21bil, has long been viewed as a takeover target for the likes of Citigroup Inc or British rival Barclays Plc.
The bank’s shares ended slightly weaker in Hong Kong but gained 2% in London morning trading as investors digested the death of former banking executive Tan Sri Khoo Teck Puat on Saturday in Singapore.
Khoo, 87, who owned 13.4% of the bank worth around US$2.7bil, had been in the news last October on talk he might sell his Standard Chartered stake.
“While status quo is likely near-term, we believe what may be more likely longer-term is a sale, either to the market, or more plausibly to a bank or strategic investor, given the bank’s unique geographic, strategic and growth appeal,” Goldman Sachs said in a note to clients on Monday.
Khoo leaves behind 14 children from two wives, both of whom are dead. None of the children are bankers.
Youngest son Eric is a well-known Singapore art film maker, and a few others work in the hotels which Khoo owned.
“It boils down to interest and valuations and whether or not you can take it over,” Lok said, adding that a strategic purchase of Khoo’s stake would be “a good first step”.
Khoo’s Standard Chartered stake is held through his companies Goodwood Park Hotel Ltd, Central Properties Ltd, Hotel Malaysia Ltd and a few unlisted entities.
Justin Doebele, a contributing editor at Forbes magazine and family friend who is acting as spokesman, said that the family had no comment on its Standard Chartered stake.
A Standard Chartered spokeswoman said the bank had no indication from the Khoo family other than that they were committed to holding on to the stake.
Goldman said interest could come from several quarters, including large banks in the United States, Britain and continental Europe, and potentially Temasek Holdings, the Singapore government investment agency, which had actively bought equity stakes in banks around Asia in the past few years.
Khoo was one of three financiers who rescued Standard Chartered in 1986 by collectively buying 37% of the bank to prevent a hostile takeover bid by Britain’s Lloyds Bank, now called Lloyds TSB Group Plc.
“His death should not have an immediate impact and we suspect that, whilst not actively for sale, had an offer come in at the right price, consideration would have been given to selling the stake any way,” Merrill Lynch said in a research note.
Shares in Standard Chartered, which reported last week a 22% increase in 2003 pre-tax profits, ended down 0.4% in Hong Kong after it lost the bidding for a South Korean bank to Citigroup.
Citigroup said yesterday it would buy KorAm Bank, South Korea’s sixth-largest lender, for US$2.7bil.
Standard Chartered owns 9.8% of KorAm and analysts expect it will eventually unload its stake. – Reuters
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