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

Q&A: Decathlon Capital On Revenue-Based Alternative Lending

Oct 30 2017 | 3:49pm ET

The explosion in private credit activity since the end of the financial crisis is...

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

CAIS: How Technology is Disrupting the Alternative Investment Industry

Nov 7 2017 | 5:35pm ET

If there’s one thing that alternative investment professionals can agree on, it...