October 17, 2025 | Financials | Asia | Active

Hang Seng Bank / HSBC: Deal Insight


On 9-Oct-25, HSBC announced plans to take full control of its Hong Kong subsidiary, Hang Seng Bank (“Hang Seng”), through a court-sanctioned scheme of arrangement. Target shareholders are offered HKD 155 per share, a 30.3% one-day premium and above the highest price reached by Hang Seng over the past three and a half years. The consideration will be downwardly adjusted for any dividends, although shareholders can still receive a 2025 interim dividend (HKD 1.30, ex-date 23-Oct-25), which will not be deducted from the scheme consideration; any subsequent distributions will be deducted. In the Rule 3.5 announcement, HSBC confirmed that the consideration will not be increased and that it does not reserve the right to do so, which essentially removes any optionality. Funding will come from HSBC’s own financial resources, and BofA and Goldman Sachs are satisfied with the availability of funds. Given HSBC’s stake, held through HSBC Asia Pacific, the scheme targets the remaining free float, framed as 36.5% of Hang Seng capital. At the Court Meeting, at least 75% of votes attached to the scheme shares (excludes HSBC) must be cast in favour, with dissenting votes not exceeding 10% of the total votes; in parallel, there is a Code Disinterested Shares vote (excludes HSBC and its concert parties), also requiring the same >75% of votes attached and <10% dissenters requirement, but for all intents and purposes, the votes are the same. A separate resolution at the EGM requires a 75% majority, and the High Court of Hong Kong must sanction the scheme. Of note, there are no antitrust conditions that need to be attained, but conditions cover compliance with the procedural requirements, the receipt of third-party consents, absence of legal impediments, absence of a MAC, and absence of material legal proceedings. HSBC may waive certain conditions in whole or in part, and the parties stated they are not aware of any authorisations required beyond the Stock Exchange approval for delisting. Although the Takeovers Code contemplates a scheme document despatch within 21 days of the announcement (i.e., 30-Oct-25), HSBC intends to ...


Contents

  • Merger Agreement
  • Merger Rationale
  • Shareholder Vote Dynamics: Court Meeting and EGM
  • Timing Considerations





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