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Friday, May 17, 2024

Abu Dhabi rivals plot to buy Standard Chartered


Shares in Standard Chartered were volatile on Thursday after the Middle East’s largest lender said it was exploring a potential takeover of the FTSE 100 lender.

First Abu Dhabi Bank (FAB) said it had previously imposed the rules on the London-based lender but no longer reviewed bids.

shares in Standard Chartered Bank It rose by more than a fifth after initial reports of takeover interest, before FAB gave up most of its gains after clarifying the deal was up about 7pc.

“First Abu Dhabi Bank confirms that it was previously in the early stages of evaluating a possible bid for Standard Chartered, but as of the date of this announcement, it has no longer done so,” FAB said.

The Gulf lender has been considering a full takeover of Standard Chartered in an attempt to create an emerging-market bank with more than $1 trillion in assets, Bloomberg first reported.

Standard Chartered had a market capitalization of around £19.4bn before news of the acquisition intentions was disclosed.

If the deal goes through, it would be the first major banking deal involving a British bank since TSB was bought by Spain’s Banco Sabadell in 2015.

The move is likely to increase speculation about other potential takeovers of Standard Chartered, which draws most of its funding from Asia.

the bank has previously Criticized for backing Beijing’s controversial national security law for Hong Kongwhich criminalizes anti-government movements in the former British colony.

Gary Greenwood, an analyst at Shore Capital, said Standard Chartered had long been seen as a bidder, mainly in relation to takeovers by Western and Chinese banks.

He added: “A takeover by a Western bank or Bank of China could damage the bank’s image in terms of regional independence. This means it may be able to better serve a wide range of clients without running into British or Chinese rivals. Political problems that capital banks may encounter.

“So a Middle Eastern bank’s bid would represent a different angle, perhaps politically more popular with its clients, although ESG advocates might not see it that way.”

Standard Chartered declined to comment.


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