Standard Chartered Plc shares fall as much as 7% on Friday after First Abu Dhabi Bank PJSC reiterated that it’s not currently evaluating a possible offer for the London-based lender.
(Bloomberg) — Standard Chartered Plc shares fall as much as 7% on Friday after First Abu Dhabi Bank PJSC reiterated that it’s not currently evaluating a possible offer for the London-based lender.
Bloomberg reported Thursday that the Middle East’s largest lender is contemplating a possible bid once a cooling off period required by UK takeover rules elapses in the summer.
“First Abu Dhabi Bank announced on 5 January 2023 that it had previously been at the very early stages of evaluating a possible offer for Standard Chartered PLC, but was no longer doing so,” FAB said in a regulatory filing Friday, “First Abu Dhabi Bank PJSC notes the recent press speculation in relation to Standard Chartered and re-iterates that it is not evaluating a possible offer for Standard Chartered.”
Read More: Abu Dhabi’s FAB Is Quietly Readying Another Run at StanChart
Under UK takeover rules, FAB’s statement meant they are precluded from making an offer for the lender in the next six months, except under certain circumstances including a third party announcing a firm intention to make an offer.
“There clearly is a great deal of speculation that First Abu Dhabi may move again, once the cooling off period ends,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. “Although the share price has fallen back, it remains highly elevated, far above the level it was before rumours began swirling at the start of the year.”
FAB’s consideration of such a deal shows the growing ambition of Middle East lenders and the wealthy oil-rich nations that back them. Still, significant regulatory hurdles and the complexity of any deal means there are great obstacles to its completion.
Standard Chartered shares pared earlier losses and were down 5% as of 11:50 a.m. in London.
What Bloomberg Intelligence Says
First Abu Dhabi Bank’s potential bid for Standard Chartered confirms its takeover appeal, given a wide emerging-market footprint, improving efficiencies and supportive capital return. A $30-35 billion likely offer implies an above-0.85x 2023 book value (40% premium), and we expect an upper range would be needed to get shareholder approval.
Jonathan Tyce, BI banking analyst
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