Standard Chartered surges on takeover talk
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Standard Chartered rises on renewed interest in Middle East acquisitions
Shares in Standard Chartered skyrocketed on renewed interest in Middle Eastern acquisitions.
The London-listed bank rose 11.4 percent to its highest level in nearly five years after reports emerged that First Abu Dhabi Bank (FAB) was considering a bid of as much as £29 billion.
It comes after FAB announced in December that it had considered a bid, but then abandoned it. The interest has put another London-listed company in the crosshairs of foreign buyers following a spate of foreign takeovers.
Takeover target: Standard Chartered rose 11.4% after reports emerged that First Abu Dhabi Bank was considering a bid of as much as £29bn
According to Bloomberg, FAB – the largest lender in the United Arab Emirates – is considering another bid that could be worth £25bn to £29bn.
That compares to the bank’s market capitalization, before the latest reports, of just under £20bn.
Under takeover rules in London and Hong Kong, where Standard Chartered is also listed, FAB would have to wait six months from the termination of the previous takeover attempt to make a new bid, unless it has the approval of the board of directors of the British bank or a rival takeover. appears.
Standard Chartered declined to comment, while FAB could not be reached for comment.
Standard Chartered shares rose 11.4 percent, or 78.8 pence, to 767.6 pence. They’re up 23 percent so far and more than 30 percent over the past 12 months.
Although headquartered in London, Standard Chartered operates primarily in Asia, Africa and the Middle East.
It employs 85,000 people worldwide. In the UK, the bank is probably best known as the shirt sponsor of Liverpool FC.
It has been the subject of takeover talks for years due to its exposure to high-growth markets and the weakness of the pound sterling, making UK assets attractively cheap for foreign buyers.
But while US JP Morgan and UK Barclays were previously linked, Gulf lenders, awash in cash from high oil prices, are making deals.
In October, Saudi National Bank bought a 9.9 percent stake in Credit Suisse for £1.2 billion.
Victoria Scholar, head of investment at Interactive Investor, said: ‘Over the past year, international companies and investors have looked to the UK as an attractive geographic location when looking for potential takeover targets given the depreciation of the pound. The recent rally in the pound could encourage investors to act quickly as valuations begin to get richer again.”
Standard Chartered will publish full-year 2022 figures next week. Analysts expect pre-tax profit of £3.9bn, up from £2.8bn a year earlier.
Russ Mould, director of investment at AJ Bell, said a successful FAB bid would represent “another UK share acquired by a foreign player.”
UK-listed companies that have completed or agreed on acquisitions by foreign players in the past year include supermarket chain Morrisons and software company Aveva.