Hong Kong’s Hang Seng Bank said on Monday that an independent board committee has deemed HSBC’s $13.6 billion take-private proposal “fair and reasonable.” The committee has recommended that minority shareholders vote in favour of the offer.
HSBC is seeking to acquire the 36.5% stake in Hang Seng Bank that it does not already own. The proposal forms part of HSBC’s strategy to strengthen its operations through selective acquisitions while continuing to exit non-core businesses, according to CEO Georges Elhedery.
Hang Seng Bank has faced pressure in recent years due to its exposure to the Hong Kong and mainland China property markets. The sector is under strain, with debt-laden developers and creditors expected to face rising financial challenges as bond maturities surge next year.
Founded in 1933, Hang Seng is one of Hong Kong’s largest banks and a key member of the HSBC Group. It serves around four million customers through digital channels and more than 250 branches across the city.
