OCBC

OCBC: Wing Hang Bank (WHB) has become a subsidiary of OCBC after obtaining an additional 0.7% stake from its voluntary cash offer for the Hong Kong bank, raising its stake to 51.1%. In addition, OCBC voluntarily announced that the group will hold firm to its offer price of HK$125/share, possibly in a bid to thwart the opportunistic move by hedge fund Elliot Capital Advisors- which recently acquired a 7.8% stake in WHB to block OCBC’s privatization attempt and force OCBC’s hand for a higher offer price. Recall in an interview last Friday, OCBC CEO Samuel Tsien has stated that the bank is happy to keep WHB listed if it does not hit 90% ownership. However, Maybank-KE believes that it may limit OCBC’s value extraction from the deal, which may include difficulty in integrating the two separate entities. The voluntary cash offer for WHB will close at 4pm on 29 Jul. At $9.44, OCBC is valued at 1.25x P/B, compared to DBS' 1.17x and UOB's 1.35x.