Elliott May Meddle With Asian Bank Sale

Jul 7 2014 | 8:35am ET

When it’s not serving as a thorn in Argentina’s side, Elliott Management is pricking the Oversea-Chinese Banking Corp.

The activist hedge fund has bought a nearly 8% stake in Hong Kong-based Wing Hang Bank, which Singapore’s OCBC has announced a US$5 billion deal for. Those shares aren’t enough to block the acquisition, but they could prevent OCBC from delisting Wing Hang.

The Singaporean bank already owns a majority of Wing Hang shares and has won regulatory approval for the deal, enough to seal the takeover. But it needs to amass 90% of Wing Hang stock in order to delist it.

If Elliott can prevent OCBC from getting to 90%, but the bank gets more than 75%, it would be required to sell enough of its shares to maintain the Hong Kong Stock Exchange’s 25% minimum float requirement. That could force it to sell shares at a significant discount to the price it paid for them.

It is unclear what Elliott hopes to achieve with its move: The hedge fund could simply be seeking a higher price from Wing Hang, or could be making a longer-term play on Wing Hang’s real-estate holdings or on OCBC’s ability to improve the bank’s performance. OCBC has previously proven willing to leave stubs of acquired companies listed.


In Depth

PAAMCO: Will Inflation Deflate the Asset Bubble?

Jan 30 2018 | 9:49pm ET

As the U.S. shifts from monetary stimulus to fiscal stimulus, market pricing should...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Boost Hedge Fund Marketing ROI By Raising Your ROO

Feb 14 2018 | 9:57pm ET

Tasked with delivering returns on client capital, a common dilemma for many alternative...

 

FINalternatives Trending

From the current issue of