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SCMP Reporter

Martin Ebner, the vociferous financier who was once dubbed the Swiss George Soros, yesterday announced he had taken a stake in HSBC Holdings worth about GBP187 million (HK$2.37 billion).

 Mr Ebner is considered one of the world's most formidable minority shareholders.

 The businessman's BZ Group was one of the driving forces behind nationwide demands to deliver shareholder value and shake up Swiss industry.

 Yesterday, Mr Ebner's principal investment vehicle - BK Vision, which holds the shares - said that the 0.4 per cent stake had been acquired in the first six months of this year, when HSBC's shares were being buffeted by the Asian financial crisis.

 The company said its motives behind the acquisition lay more in the relatively cheap valuation of the group rather than any desire to start building pressure for corporate reform.

 'HSBC has very good management, a clear strategy and good financing,' said Kurt Schildknecht, a director of BK Vision and one of Mr Ebners closest associates.

  He said the bank appeared well-prepared to deal with the Asian downturn.

 'This makes us confident that the bank will emerge well positioned from the current troubles'.

  Uncharacteristically, HSBC also volunteered comment on the investment yesterday.

 Under London Stock Exchange rules, the company does not need to disclose any shareholders with less than 3 per cent of its issued share capital.

 'We welcome the investment as evidence of confidence in the strength of the group,' an HSBC spokesman said.

 Several banking analysts have recently downgraded their profit forecasts for HSBC's 1998 and 1999 results as a consequence of the Asian financial turmoil.

 But almost all have maintained a strong buy recommendation on the stock.

 The shares are considered to be undervalued, and are not believed to reflect the expected performance of HSBC's sizeable non-Asian assets, such as Midland Bank in Britain and HSBC Americas.

 Some analysts, however, warned that with the departure of Sir William Purves in May as chairman, and the appointment of a new management - headed by John Bond as chairman and former Midlands head Keith Whitson as group chief executive - Mr Ebner will be closely watching the group's financial results.

 Poor performance at the soon-to-be merged Union Bank of Switzerland two years ago prompted Mr Ebner, who owned a sizeable stake in the bank, to unleash significant pressure.

 Mr Ebner filed lawsuits to block attempts by UBS to change its share structure, and he almost succeeded in stopping Robert Studer from becoming the chairman.

 Last year, he amassed a 30 per cent stake in Swiss insurance group Winterthur and threatened to take a majority stake.

 That move by Mr Ebner forced the company to announce its merger plans with the Swiss banking giant CS Group.

 The subsequent merger generated huge earnings for Mr Ebner.

 He also profited handsomely again when UBS and Swiss Bank agreed to merge.

  Yesterday, Mr Schildknecht said the HSBC purchase proved attractive because of the group's global commercial-banking presence.

 He said the acquisition would fit neatly with BK Visions' portfolio.

 BK Visions holds the bulk of Mr Ebner's interests in the banking and finance sector.

 Alongside the UBS interest, which accounts for 42.6 per cent of BK Vision, Credit Suisse accounts for 39.2 per cent, Swiss Re 12.2 per cent and HSBC 4 per cent.

 It was disclosed yesterday that Mr Ebner's other investment trusts had also built up a 1 per cent shareholding in Hoescht, the world's ninth-largest drug-maker, a 0.4 per cent holding in Glaxo Wellcome, the world's second-biggest drug maker, and a 0.8 per cent stake in BOC Group, the world's second-biggest industrial-gases company.

 Mr Ebner's other investment trusts include Stillhalter Vision; Pharma Vision, Roche Holdings' biggest non-family shareholder; and Gas Vision.

 Mr Ebner has in his sights Swiss industrial companies such as Alusuisse-Lonza Group, a manufacturer of packaging, chemicals and aluminum, and Asea Brown Boveri (ABB), the world's largest electrical-engineering company.

 Mr Ebner's funds own 11.6 per cent of the voting rights in Alusuisse; 13.5 per cent of the votes in ABB AG, ABB's Swiss parent company; and 2.3 per cent of votes in ABB AB, the Swedish parent company.

 They also hold 12.9 per cent of votes in Roche; 3 per cent of UBS AG, the company formed from the merger of UBS and Swiss Bank; and 3.7 per cent of Credit Suisse.

 Mr Ebner's investment in Alusuisse has given rise to talk that he hopes the diversified company would spin off its chemicals division, where profit dropped last year.

 Alusuisse chief executive Sergio Marchionne earlier this year said he was flattered that Mr Ebner was investing in the company.

 Still, he said, he did not intend to sell any of the company's divisions.



Ebner acquires stake in HSBC worth $2.3b