FAB may renew $35 billion offer for Standard Chartered

The Abu Dhabi lender is considering reviving the bid once a lock-up period that prevents it immediately doing so expires, offering $30 billion to $35 billon compared with StanChart’s market value of $24 billion, according to Bloomberg

People pass by the logo of Standard Chartered at the SIBOS banking and financial conference in Toronto, Ontario, Canada. — Reuters

By Reuters

Published: Thu 9 Feb 2023, 5:33 PM

First Abu Dhabi Bank (FAB), the United Arab Emirates’ biggest lender, could renew a potential offer for Britain’s Standard Chartered, once lock-up rules from its previous aborted bid expire, Bloomberg News reported on Thursday.

StanChart shares rose as much as nine per cent on the news report. A StanChart spokesperson declined to comment on the report, while FAB could not immediately be reached for comment.

News of the potential offer first came on January 5, when FAB said it had considered a bid for London-listed Standard Chartered but was no longer doing so.

The Abu Dhabi lender is considering reviving the bid once a lock-up period that prevents it immediately doing so expires, offering $30 billion to $35 billon compared with StanChart’s market value of $24 billion, Bloomnberg reported.

Under United Kingdom and Hong Kong takeover rules, FAB cannot bid for StanChart within six months of the previous potential bid’s termination without the consent of the British bank’s board, or in the absence of a rival takeover.

StanChart has for years been the subject of takeover talk thanks to its relatively cheap price and exposure to fast-growing markets in Asia, Africa and the Middle East, but regulatory and practical complexities have stymied the consummation of any such approach.

Further practicalities such as possible opposition from U.S. authorities to an important dollar-clearing bank being taken over, mean any deal would be very hard to pull off in reality, analysts have said.

JPMorgan and Barclays have been among Western players linked with emerging markets-focused StanChart in the past, but banks from the Middle East now flush with cash have emerged as potential candidates for such deals more recently.

The Gulf region is witnessing an economic boom fuelled by higher oil prices in the wake of Russia’s war on Ukraine, with sovereign wealth funds and banks on the hunt for deals amid a weakened global outlook.

Saudi National Bank in October announced it was investing up to $1.5 billion in Credit Suisse, representing a stake of up to 9.9 per cent. — Reuters