Standard Chartered surges on takeover talk
Standard Chartered surges amid renewed takeover interest from the Middle East
Shares in Standard Chartered soared amid renewed takeover interest from the Middle East.
The London-listed bank rose 11.4 per cent to its highest level for near five years after reports emerged that First Abu Dhabi Bank (FAB) was considering a bid worth as much as £29billion.
It comes after FAB disclosed in December that it had been mulling a bid but then abandoned it. The interest puts another London-listed company in the crosshairs of foreign buyers after a wave of overseas takeovers.
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Takeover target: Standard Chartered rose 11.4% after reports emerged that First Abu Dhabi Bank was considering a bid worth as much as £29bn
According to Bloomberg, FAB – the biggest lender in the United Arab Emirates – is again mulling a bid that could be worth £25billion to £29billion.
That compares with the bank’s market cap, before the latest reports emerged, of just under £20billion.
However, under takeover rules in London and Hong Kong, where Standard Chartered is also listed, FAB would have to wait for six months from the previous takeover attempt’s termination to mount another offer unless it has the consent of the UK bank’s board or a rival takeover emerges.
Standard Chartered declined to comment, while FAB could not be reached for comment.
Standard Chartered shares rose 11.4 per cent, or 78.8p, to 767.6p. They are up 23 per cent for the year to date and by more than 30 per cent over the past 12 months.
Despite its headquarters being in London, Standard Chartered operates mainly 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 for Liverpool FC.
It has for years been the subject of takeover talk given its exposure to fast-growing markets and the weakness of sterling, which makes UK assets attractively cheap for overseas buyers.
But while it was the likes of America’s JP Morgan and Britain’s Barclays that were previously linked with it, lenders in the Gulf, flush with cash from high oil prices, are making deals.
In October, Saudi National Bank bought a 9.9 per cent stake in Credit Suisse for £1.2billion.
Victoria Scholar, head of investment at Interactive Investor, said: ‘International businesses and investors have been looking towards the UK over the last year as an attractive geography in the search for potential takeover targets, given the depreciation of the pound. The recent revival of the pound could spur investors to move quickly as valuations become richer again.’
Standard Chartered publishes annual results for 2022 next week. Analysts expect pre-tax profits of £3.9billion, up from £2.8billion a year earlier.
Russ Mould, investment director at AJ Bell, said that a successful FAB bid ‘would represent yet another UK stock acquired by a foreign player’.
UK-listed companies to have completed or agreed takeovers by overseas players over the past year include the supermarket chain Morrisons and software firm Aveva.