Wing Hang’s third-biggest investor accepts takeover by OCBC

Aberdeen Asset Management Plc, the third-biggest shareholder in Wing Bank Bank Ltd., agreed to sell its shares in the lender to Oversea-Chinese Banking Corp., moving the Singaporean buyer closer to a full takeover.
“We’ve tendered” the entire stake Aberdeen held in Wing Hang, Hugh Young, a Singapore-based managing director at the fund management company, wrote in an e-mail yesterday without saying when the sale took place. Aberdeen owned 7.4 percent of the Hong Kong-based target as of July 1, data compiled by Bloomberg show.
The fund manager’s decision came as Hong Kong regulatory filings showed acceptances for the USD5 billion offer had accelerated in the past week. They had dragged earlier this month as Elliott Capital Advisors LP boosted its stake in Wing Hang to 7.8 percent, which Mizuho Securities Asia Ltd. said at the time could put pressure on OCBC to raise its HKD125 per- share bid price.
“Elliott not increasing its stake beyond 8 percent and Aberdeen tendering should help the offer in a very significant way,” Wee Siang Ng, Singapore-based head of research at Maybank Kim Eng Research Pte, said. “Minority shareholders who wanted to hold back for a higher offer price initially would probably be more willing to surrender their shares.”
Shares of OCBC, Southeast Asia’s second-largest lender, gained 0.8 percent to S$9.73 at 4:19 p.m. in Singapore yesterday, poised for the highest close since June 16. Wing Hang added 0.1 percent to HK$124.70 in Hong Kong.
Koh Ching Ching, a Singapore-based OCBC spokeswoman, declined to comment. Aberdeen owned 6.8 percent of OCBC as of May 7, an investment worth about $1.9 billion as of yesterday’s prices, data compiled by Bloomberg show. The 7.4 percent stake in Wing Hang tendered by the fund manager would have been worth about $360 million.
“I thought Aberdeen would definitely support the offer as it has much to lose if OCBC shares don’t do well,” Maybank’s Ng said. “Their investment in OCBC is so much bigger than in Wing Hang.”
The Singaporean lender’s offer, made in April, has been accepted by shareholders including the family of Wing Hang’s Chairman Patrick Fung and Bank of New York Mellon Corp.
OCBC raised its investment in Wing Hang by almost 11 percentage points to 67.8 percent in the five days to July 22, filings with Hong Kong’s Securities and Futures Commission showed. OCBC had 56.9 percent on July 17, adding just 6.5 percentage points since July 4, filings showed.
“It’s nice to see this moving in the right direction,” Jim Antos, a Mizuho analyst based in Hong Kong, said. For minority shareholders, “HKD125 is a more than fair price for Wing Hang Bank. Looking at the history of bank mergers in Hong Kong, it’s a fair deal.”
Hong Kong regulations allow OCBC to delist Wing Hang once it owns 90 percent of the shares. Should it fall short, OCBC must ensure that at least 25 percent of Wing Hang stock remains in public hands, meaning it may have to sell stock to cut its stake. The offer closes July 29. Bloomberg

Jonathan Burgos and
Sanat Vallikappen