HK Chinese Bank takes control of mortgage firm

THE Hongkong Chinese Bank (HKCB) has bought a controlling stake in Hongkong Building and Loan Agency only seven weeks after it joined a consortium of banks which blocked the sale of the same shares to another Indonesian-controlled group.

HKCB was one of five banks which objected to a plan to sell control of Building and Loan to China Strategic Investment. Under that deal, minority shareholders in the takeover target would have been offered $20.43 a share.

The five banks - HKCB, Westdeutsche Landesbank, Bank Austria, Societe Generale and J. Henry Schroder Wagg - were part of a group of eight behind a revolving $435 million facility granted to Building and Loan in June last year.

Their objection to the change of beneficial ownership of the company led to the collapse of a double takeover bid mounted by China Strategic on Building and Loan and Pacpo Holdings.

HKCB, which is 59.8 per cent owned by Lippo, has now made its bid for Building and Loan, pitched at $19 a share. It will make a conditional cash offer to Building and Loan minority shareholders at the same level.

The latest deal values Building and Loan at $243 million. The China Strategic terms valued it at $261 million.

China Strategic, which is controlled by Indonesian tycoon Oei Hong Leong and the Sinar Mas group, agreed with Pacific Concord Holdings last December to buy its 69.44 per cent holding in Pacpo. At that time, Pacpo held a 67.6 per cent stake in Building and Loan.