9th Feb 2023 10:47
(Correcting Standard Chartered's market value, which is around USD24 billion, not USD24 million)
(Alliance News) - First Abu Dhabi Bank PJSC is pressing ahead with a potential USD35 billion offer for Standard Chartered PLC, according to Bloomberg reports on Thursday.
Standard Chartered was the top FTSE 100 performing stock on Thursday morning, rising 8.0% to 743.60 pence each.
Bloomberg said FAB's proposed acquisition of the London-based lender was still in play, after a move to put earlier takeover plans on hold "didn't halt its ambitions to become a global financial powerhouse".
https://www.bloomberg.com/news/articles/2023-02-09/standard-chartered-is-still-in-play-with-fab-s-operation-foxtrot
It added FAB is worth around twice as much as Standard Chartered and is considering an all-cash bid in the range of USD30 billion to USD35 billion.
Standard Chartered's market value is around USD24 billion, compared to FAB's USD43 billion, Bloomberg said, claiming the recent drop in the British pound adds to Standard Chartered's attractiveness, trading at just 0.56 times its book value.
FAB officials are reportedly working under the radar on a possible bid, codenamed Silver-Foxtrot, once a cooling off period required by UK takeover rules elapses, according to Bloomberg sources. Wall Street veteran Ken Moelis is working closely with FAB executives, key members of Abu Dhabi’s ruling family and some of the emirate’s sovereign funds on a possible transaction, they added.
The sources said FAB recently completed due diligence on Standard Chartered, and asked not to be identified as "the matter is private", said Bloomberg, adding any deal would be dependent on market conditions and how Standard Chartered shares continue to perform.
Any acquisition would be funded by backers including the Abu Dhabi sovereign fund Mubadala Investment Co and the emirate's ruling Al Nahyan family, said the Bloomberg sources.
Bloomberg noted FAB Chair Sheikh Tahnoon bin Zayed Al Nahyan is a powerful royal, who has taken on a more prominent role in leading Abu Dhabi emirate's political and economic goals. Abu Dhabi is one of the emirates within the United Arab Emirates.
"After a period of higher crude prices, Abu Dhabi is keen to use its oil windfall to transform the city’s financial sector, which has lagged many of its other key industries such as energy, tourism and logistics," said Bloomberg reporters Ambereen Choudhury, Jan-Henrik Foerster and Dinesh Nair.
"Such an attempt would represent a step beyond the moves other wealthy Gulf nations have made to take minority stakes in firms like Barclays PLC and Credit Suisse Group AG."
Boston University Professor and a former US Federal Reserve bank examiner Mark Williams added: "FAB and the royal family are simply responding to global finance trends and the swelling amounts of capital in the Middle East.
"The state's goal of acquiring a reputable multinational bank is also linked to a desire to gain greater legitimacy in global financial circles while strengthening control over the storage and movement of funds."
Standard Chartered Chief Executive Officer Bill Winters recently told the World Economic Forum gathering in Davos, Switzerland in January that it was "quite logical" for Middle Eastern banks to be interested in buying European financial institutions, due to their relatively low valuations.
However, Winters added he did not think a deal with FAB was likely.
"This is not something we’ve either engaged with, or been interested in," said Winters in January. "The thing with Standard Chartered is we are doing very well all by ourselves. Everything is on track for us."
By Greg Rosenvinge, Alliance News reporter
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