M and A
ICBC Buyout Of Subsidiary Sends Shares Soaring
Industrial and Commercial Bank of China (Asia) enjoyed a 25
per cent rise in its share value to HK$28.75 after its parent
company recently offered to take the firm private for HK$10.83
billion ($1.4 billion).
The offer of HK$29.45 per share from the Industrial and
Commercial Bank of China was 2.14 times the unit's book value as
of the end of 2009. The bank has been actively embarking on
acquisitions over the past two years and has spent more than $6
billion on M&A activity in Canada, Indonesia, Macau and South
Africa.
The purchase of the shares it still does not own in ICBC (Asia)
will make it easier for the parent firm to transfer capital to
the other when necessary. Before the buyout, ICBC owned a 73 per
cent stake.
"As the business scale of ICBC Asia is expected to continue to
develop in the next few years, its capital requirements may need
to increase correspondingly," ICBC said in a statement.
ICBC Asia has a market capitalisation of HK$31.17 billion and
operates in 44 branches in Hong Kong.