Wing Hang shares soar on takeover approach
Bank rises nearly 40pc after potential suitors show interest in shareholder stakes, lifting stocks of city's other family-owned lenders
Wing Hang Bank's shares rocketed nearly 40 per cent yesterday after it said its top shareholders had been approached by potential buyers of their stakes, igniting speculation that smaller rival Dah Sing Bank might be next.
It is the city's second family-run bank to have reported similar overtures in two months.
Chong Hing Bank said on Monday that it remained in talks with parties including Yue Xiu, the investment arm of the Guangzhou city government. Local media reported one suitor had raised the offer price to 2.4 times book value from two times.
"Buyers are shopping around the city for local banks," said Frank Yuen, an analyst at BNP Paribas. Seeing that potential buyers of one bank are willing to raise their offers, rival banks may be lured to the negotiating table for a possible sale, he said.
Wing Hang soared 39.3 per cent to close at HK$116.80 yesterday, the highest since February 2011. More than five million shares were traded, against an average of two million per day last week. Chong Hing, the smallest listed family-run bank, closed at HK$32.75, up 3.3 per cent.
Dah Sing, the second-smallest family-run bank, controlled by the Wong family, would be the next potential takeover target, Yuen said. Bank of East Asia would be an unlikely first-round target because it was much larger, he said.
