China Construction Bank
Founded in 1954 as the People’s Construction Bank of China, China Construction Bank is one of the 'big four' banks in the People's Republic of China. The other three are Industrial and Commercial Bank of China, Bank of China and Agricultural Bank of China. In 2011 CCB was the second largest bank in the world by market capitalisation and 13th largest company in the world.
US bank to lift stake
Bank of America Corp plans to exercise a call option to raise its stake in China Construction Bank Corp to 19.13 per cent from 10.75 per cent in a long-awaited deal worth about HK$54.8 billion.
CCB said yesterday that it had received a notice from Bank of America proposing to buy 19.58 billion H shares from China SAFE Investments through a call option this month.
It did not say how much the US lender would pay, but the exercise price per share would be 1.2 times CCB's audited net asset value at the end of September.
Sources said the audited net asset value per share was 2.05 yuan (HK$2.33), so Bank of America had to pay 2.46 yuan or HK$2.80. CCB shares fell 0.72 per cent to close at HK$4.11 yesterday.
The shares Bank of America seeks will be locked up until late 2011. After the sale, SAFE's holding of CCB's H shares will drop to 57.03 per cent.