Banking
First Abu Dhabi Bank could renew $35 billion offer for StanChart -Bloomberg News
Global Banking & Finance Review®
Company
By Lawrence White
LONDON (Reuters) – First Abu Dhabi Bank (FAB), the United Arab Emirates’ biggest lender, could renew a potential offer for Britain’s Standard Chartered, once lock-up rules from its previous aborted bid expire, Bloomberg News reported on Thursday.
StanChart shares rose as much as 9% on the news report.
A StanChart spokesperson declined to comment on the report, while FAB could not immediately be reached for comment.
News of the potential offer first came on Jan. 5, when FAB said it had considered a bid for London-listed Standard Chartered but was no longer doing so.
The Abu Dhabi lender is considering reviving the bid once a lock-up period that prevents it immediately doing so expires, offering $30 billion to $35 billon compared with StanChart’s market value of $24 billion, Bloomnberg reported.
Under United Kingdom and Hong Kong takeover rules, FAB cannot bid for StanChart within six months of the previous potential bid’s termination without the consent of the British bank’s board, or in the absence of a rival takeover.
StanChart has for years been the subject of takeover talk thanks to its relatively cheap price and exposure to fast-growing markets in Asia, Africa and the Middle East, but regulatory and practical complexities have stymied the consummation of any such approach.
Further practicalities such as possible opposition from U.S. authorities to an important dollar-clearing bank being taken over, mean any deal would be very hard to pull off in reality, analysts have said.
JPMorgan and Barclays have been among Western players linked with emerging markets-focused StanChart in the past, but banks from the Middle East now flush with cash have emerged as potential candidates for such deals more recently.
The Gulf region is witnessing an economic boom fuelled by higher oil prices in the wake of Russia’s war on Ukraine, with sovereign wealth funds and banks on the hunt for deals amid a weakened global outlook.
Saudi National Bank in October announced it was investing up to $1.5 billion in Credit Suisse, representing a stake of up to 9.9%.
(Reporting by Sinchita Mitra in Bengaluru and Lawrence White in London; editing by Dhanya Ann Thoppil and Emelia Sithole-Matarise)
Corporate governance refers to the systems, principles, and processes by which a company is directed and controlled, ensuring accountability and fairness in a company's relationship with its stakeholders.
Emerging markets are economies that are in the process of rapid growth and industrialization, characterized by increasing investment opportunities and higher potential returns, but also higher risks.
Investment management is the professional management of various securities and assets to meet specified investment goals for the benefit of investors, including institutions and individuals.
A bid in finance refers to an offer made by an investor to purchase a security or asset at a specified price, indicating the maximum amount they are willing to pay.
A lock-up period is a predetermined amount of time following an IPO during which major shareholders, such as company executives and insiders, are restricted from selling their shares.
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