As the regulatory deadline falls today on HSBC's sale of its stake in Ping An Insurance, the mainland's No 2 life insurer, the market waits to see if the deal will proceed, be delayed - or called off.
Views on whether the second part of the transaction, worth about US$7.4 billion, can be completed are divided after several dramatic turns of events, including the transfer out of Hong Kong the head of China Development Bank's branch in the city, which was initially prepared to provide loans to support a Thai conglomerate's bid for the stake.
Questions quickly arose, however, as to the ability of the Charoen Pokphand Group (CP) to fund the acquisition and as to the identity of an alleged buyer behind the scenes.
Sharnie Wong, a banking analyst at Barclays, said HSBC's stake in Ping An had been reclassified from an associate holding to an available-for-sale investment, and the statutory and regulatory accounting impact would be similar whether or not the second tranche of the transaction was completed, suggesting that the deal was likely to go as planned.
However, Patricia Cheng, an analyst at CLSA Asia-Pacific Markets, said Ping An might face a trading overhang if HSBC's sale to CP fails to win regulatory approval by today's deadline.
Financing support from CDB appeared to fall apart as the Beijing-based lender started questioning who the real buyer was.
Xiao Jianhua, a secretive but well-connected mainland businessman, denied allegations he was behind it.
CP said it was acting entirely on its own and "not in concert with, or on behalf of, any third party", after media reports about Xiao's participation.
According to people familiar with the matter, HSBC and Bangkok-based CP are likely to make an official announcement today after the market closes.
Shares in HSBC have climbed 8.6 per cent this year to yesterday's close of HK$88.30, near a 52-week high, while Ping An has risen 7.2 per cent, to HK$69.55. The Hang Seng Index gained 4.7 per cent over the same period.
The regulatory hurdle is one of the biggest obstacles to this deal. Companies are allowed to buy a stake in a mainland insurer only with their own money, not through bank loans or other third-party financing.
However, one of the sources said China Insurance Regulatory Commission rules could be interpreted differently, because the sale took place in an offshore market, and margin financing through a bank could be one of the solutions if HSBC decided to sell Ping An's shares in block trades to institutional investors.