Date
24 March 2017
BOC Hong Kong is seeking premium valuation for Nanyang Commercial Bank as it offloads the unit. Photo: HKEJ
BOC Hong Kong is seeking premium valuation for Nanyang Commercial Bank as it offloads the unit. Photo: HKEJ

BOC Hong Kong seeks to sell Nanyang Bank for minimum HK$68 bln

BOC Hong Kong (Holdings) (02388.HK) is seeking to sell its unit Nanyang Commercial Bank for a minimum of HK$68 billion through the Beijing Financial Assets Exchange, the Hong Kong Economic Journal reported.

The minimum price represents a 1.95 price-to-book multiple. Interested buyers can submit bids by Aug. 25.

Analysts say the price floor is 25 percent above the independent valuation of HK$54.6 billion on Nanyang Bank.

The premium being sought reflects the upbeat outlook of BOC Hong Kong on Nanyang Bank’s prospects.

BOC Hong Kong’s management, meanwhile, said the price floor was set due to the fact that the buyer can obtain 100-percent control in Nanyang Bank. Also, there is limited supply of such acquirable lenders.

Yuexiu Group and China Cinda Asset Management Co. (01359.HK) are among the potential buyers, according to reports. 

Yuexiu Group is said to have arranged a US$8 billion of bridge loan for the potential acquisition.

The group can consolidate Nanyang Bank’s businesses with that of its subsidiary Chong Hing Bank, Mizuho Securities noted.

[Chinese version中文版]

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