Overseas Chinese Banking Corporation (OCBC Bank)

[Layman A]

Wing Hang may fall 40% if OCBC hindered, Credit Suisse says: Update PDF

Tags: Oversea-Chinese Banking Corp | Wing Hang Bank
Written by Bloomberg
Tuesday, 08 July 2014 14:29
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Wing Hang may fall 40% if OCBC hindered, Credit Suisse says: Update
Sweeter deal
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Shares of Wing Hang Bank, a Hong Kong lender being taken over by Oversea-Chinese Banking Corp., could fall as much as 40% if OCBC doesn’t garner enough stock to delist the company, Credit Suisse Group AG said.

Under Hong Kong rules, Singapore-based OCBC needs to own at least 90% of Wing Hang’s shares to delist the bank, analysts Sanjay Jain and Vineet Thodge wrote in a report today. Failing to win acceptances to take it over that threshold before the takeover offer expires on July 29 means OCBC will have to pare its holdings to 75%, the analysts said.

The report came after a regulatory filing showed billionaire Paul Singer’s Elliott Capital Advisors LP had raised its stake in Wing Hang to 7.8%. OCBC bid US$5 billion ($6 billion) for Wing Hang in April, an offer that had been accepted by holders of 50.4% of the Hong Kong lender’s shares, the two banks said in a July 4 statement.

“Minority investors might be looking for higher valuations and delay submitting their shares into the tender offer to as late as possible,” Jain and Thodge wrote. “This would make it difficult for OCBC to gauge the potential acceptance level and whether to increase the price or not.”

Wing Hang shares lost 0.6% to HK$125.50 as of Hong Kong’s midday trading break. The benchmark Hang Seng Index dropped 0.1%. OCBC rose 0.1% to $9.47 in Singapore trading.





Home THE DAILY EDGE Business Wing Hang may fall 40% if OCBC hindered, Credit Suisse says: Update - Sweeter deal
Wing Hang may fall 40% if OCBC hindered, Credit Suisse says: Update - Sweeter deal PDF

Tags: Oversea-Chinese Banking Corp | Wing Hang Bank
Written by Bloomberg
Tuesday, 08 July 2014 14:29
Article Index
Wing Hang may fall 40% if OCBC hindered, Credit Suisse says: Update
Sweeter deal
All Pages
Page 2 of 2

SWEETER DEAL
Shares of Wing Hang rose 0.5% since July 2, when Elliott Capital bought 8.7 million shares at HK$125 ($20), according to a July 3 disclosure posted on the website of Hong Kong’s Securities & Futures Commission. The price matched the per-share amount offered by OCBC on April 1.

“One reason to buy in at this point would be to put pressure on OCBC to sweeten the deal” for minority investors, Jim Antos, a Hong Kong-based analyst at Mizuho Securities Asia, wrote in a note to clients today.

Shareholders including the family of Wing Hang’s Chairman Patrick Fung and Bank of New York Mellon Corp. had accepted the bid, OCBC said in April.

The Singaporean bank will keep Wing Hang’s shares listed if it can’t buy at least 90% of it, Chief Financial Officer Darren Tan said yesterday in response to questions on Elliott Capital’s stake. With the start of the general offer to Wing Hang’s investors, it’s too early to comment on possible outcomes, he said.

BIGGEST TAKEOVER
“OCBC has time on its side,” Antos wrote. While the lender can retain the Wing Hang listing indefinitely, minority shareholders may not be willing to hold on to their stakes because trading in the stock will be thin once the general offer is completed, he said.

The acquisition would give OCBC more access to China- related business in a city that is the biggest center for offshore yuan trading. The bid is the largest takeover of a Hong Kong bank since DBS Group Holdings, OCBC’s biggest competitor in Singapore, offered US$5.4 billion for Dao Heng Bank Group in April 2001.

Connie Leung, a Hong Kong-based spokeswoman for Wing Hang, didn’t immediately respond to an e-mail seeking comment.

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OCBC already state their stance clearly here.
If it cannot be done, they will not force it !
So end of the day if only 60% accepted the offers, they will just let it be.

So the scenario will be :

1. OCBC let Wing Hang listed as it is after the exercise.
2. Wing Hang share price plunge 40% back to pre-acquisition price.
3. Greedy minorities ( including Elliott ) could have made 40% profit, but end up suck thumb !

[brattzz]

so how about HK listing requiring minimum 25% float if unable to delist? :O
that should force OCBC to release back the shares into the market?
That's the critical question here ain't it?

[Temperament]

The Singaporean bank will keep Wing Hang’s shares listed if it can’t buy at least 90% of it, Chief Financial Officer Darren Tan said yesterday in response to questions on Elliott Capital’s stake.
Unquote:-
No matter what, OCBC has to keep on buying @ HK$125 until offer date expires on July 29. And the percentage reach is unpredictable. The worse case is 89.9% and then has to off load back to the market until 75%.
But i don't think so it will happen like that. CFO is just psyching the retailers in the market to accept the offer price. Besides, there is a remote possibility that Elliott may be willing to sell to OCBC at an acceptable price. (OCBC may up it's offer price to suit Elliott's price)

NB:-
IMO, i don't think Elliott or anyone is greedy in this instance. i think Elliott is a "HERO" for retailers who have WING HANG shares before OCBC's offer.
In fact, i think Elliott must have done a lot of homework and think HK$125.0 is too cheap for delisting. i really don't think Elliott wants to take pot shot at OCBC or speculating for nothing.
Not vested.

[sgd]

that's the thing it can also backfire, if there are minority shareholders "holdout" too greedy refuse to accept at most the takeover fail but they are already largest shareholder what is to prevent ocbc from playing punk with minority shareholders of WH after that? like playing waiting game, don't declare dividend make wing hang pay for everything?

[Temperament]

That's exactly the thing. At HK$125.0, Elliott think OCBC is playing punk already.

[Layman A]

That's exactly the thing. At HK$125.0, Elliott think OCBC is playing punk already.

No offence, but paying HK$125 is playing punk ?

Then New York Mellion and the Founder family must be idiot to accept the offer !

Wing Hang Bank is nothing without the OCBC deal !

[desmondxyz]

Elliot is making a big gamble by pressuring OCBC to flash the final trump card..... Let's see who will laugh till the end .....

(Not vested. Watching show)

[Temperament]

That's exactly the thing. At HK$125.0, Elliott think OCBC is playing punk already.

No offence, but paying HK$125 is playing punk ?

Then New York Mellion and the Founder family must be idiot to accept the offer ! Big Grin

Wing Hang Bank is nothing without the OCBC deal !

The market is one thing to you and another thing to someone. The question is why Elliott thinks OCBC is playing punk already? But no one can surely says Elliott is right and "Then New York Mellion and the Founder family must be idiot to accept the offer ! -as said by you.

Really, we must wait and see what is going to happen next in the market.
And as always most of the times, it does not matters a bit who is right but the market always is. So Elliott may be wrong but the market still may be on his side.
In other words Market is always right not you or me or anybody.
How nice if only i am sure what the market going to do next or i can influence the market. Sweet dream.
If only i know i am vested already.

[greengiraffe]

http://www.theedgesingapore.com/componen...?task=view

OCBC says acquiring 50% of Wing Hang ‘most important thing’, no plans to sell GE...

WRITTEN BY BLOOMBERG
THURSDAY, 10 JULY 2014 20:46
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OCBC says acquiring 50% of Wing Hang ‘most important thing’: Update
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Oversea-Chinese Banking Corp., which is buying Wing Hang Bank, achieved the “most important thing” by gaining control of more than 50% of the Hong Kong lender, Chief Executive Officer Samuel Tsien said.

OCBC, as the Singapore lender is known, will forge ahead to garner more Wing Hang stock even as hedge fund Elliott Capital Advisors LP buys shares of the Hong Kong bank, Tsien said in an interview in Singapore today.

“We know that they’re there, but in terms of would it distract us or change us from what we’re currently doing, it will not,” Tsien said. “We’ll just proceed according to the general offer document and if we cannot get 90%, we’ll keep the company listed.”

OCBC bid US$5 billion for Wing Hang in April, an offer that has been accepted by 50.4% of the shareholders, including the family of Wing Hang’s Chairman Patrick Fung and Bank of New York Mellon Corp. Billionaire Paul Singer’s Elliott Capital said last week it boosted its stake in Wing Hang, which Mizuho Securities Asia said could put pressure on OCBC to raise its offer price.

Elliott Capital increased its stake in Wing Hang to 7.8% by purchasing an additional 8.7 million shares, it said in a July 3 filing posted on the website of Hong Kong’s Securities & Futures Commission. The shares were bought at HK$125 ($19.9), the same as OCBC’s offer.

Wing Hang shares traded as high as HK$127 on July 7 following Elliott’s purchase, exceeding OCBC’s bid price. The stock rose 0.2% in the past week, while OCBC dropped 1%.

...

[AlphaQuant]

Analysis from Maybank

*******************

Possible scenarios for WHB acquisition
The move by Elliott Capital Advisors to accumulate up to 7.8% stake in Wing Hang Bank (WHB) could throw a spanner on OCBC's bid to take WHB private, which requires at least 90% acceptances. In our view, the two possible outcomes are:

Outcome #1:
OCBC receives less than 90% acceptances but more than 75%. OCBC is required to sell anything in excess of 75% as per the listing requirement that stipulates a minimum 25% free float. We expect WHB's share price to collapse to HKD83 (1.2x P/BV), its last traded price before the M&A excitement emerged. This represents a 33.6% downside from the offer price of HKD125. OCBC could incur losses as much as SGD311m, equivalent to 1.4% of its core equity Tier 1. From a P&L standpoint, the impact is modest but it could reduce management flexibility.

Outcome #2:
Under a worse-case scenario, OCBC raises the offer price such that WHB can be taken private. In our view, this is an unlikely outcome as it could put management's credibility at risk. Already, the share price of OCBC has suffered and the earlier guidance of EPS and ROE accretion by FY17E could be pushed back. We think OCBC is more likely to keep its shareholding at 75% before embarking on its second privatisation bid a year later.