China's Yue Xiu to buy Hong Kong's Chong Hing Bank for $1.5 bln
HONG KONG Oct 25 (Reuters) - Yue Xiu Group, the trading arm of China's Guangzhou city government, has agreed to buy a stake of up to 75 percent in family-run Chong Hing Bank Ltd for about HK$11.64 billion ($1.5 billion) as part of its push into Hong Kong.
The deal would give Yue Xiu Group, which operates real estate, securities, and transportation infrastructure businesses, access to Chong Hing's 53 branches in Asia's sixth-biggest bank loan market.
Yue Xiu is offering HK$35.69 per share, or a 4.6 percent discount to Chong Hing's last traded price, the two companies said in a joint statement on Friday. Chong Hing shares were suspended from on Thursday, pending a merger announcement.
Hong Kong's Liu family owns about 60 percent of Chong Hing Bank. Japan's top lender Mitsubishi UFJ Financial Group Inc also owns a 9.7 percent stake in the bank.
The deal and would be the first takeover of a Hong Kong bank since the $4.7 billion purchase of Wing Lung Bank by China Merchants Bank in June 2008.
Nomura Holdings is advising Yue Xiu, while UBS is the financial adviser to Chong Hing Bank, the statement added.
($1 = 7.7535 Hong Kong dollars) (Additional reporting by Elzio Barreto; Reporting by Denny Thomas. Editing by Jane Merriman)
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