Bank of East Asia 23 announced on November 20 that it had struck a deal with the controlling shareholders of FPB Bank 717 to acquire their combined 75% stake. The 1.5 times book value price tag equates to HK$3.50 $0.45 per FPB Bank share and is higher-than-expected. Bank of East Asia will also launch a general offer to acquire all the remaining shares at the same price.
That the acquisition removes an obstacle in the way of Bank of East Asia's China aspirations has been well documented, but the impact on its Hong Kong operations and valuation have received less coverage and, according to analysts, is the greater rationale behind the deal. Judgment...
