Shares in the Liu family-owned Chong Hing Bank rose to a 25-month high yesterday after reports said the Lius were ready to sell the lender. The stock jumped 9.8 per cent to close at HK$20.90, after rising as much as 14 per cent. The price surge followed a similar jump the previous day. Transaction volume increased fourfold, to 2.58 million shares, compared with the previous trading day. Shares of the parent company, Liu Chong Hing Investment, rose 5.1 per cent to close at HK$12.30, their highest since 2007. A source from an investment bank said the lender is in talks to sell the business. The bank declined to comment. The board was not aware of any information that must be announced, the bank said in a statement to the Hong Kong stock exchange following a jump in the price of the stock and an increase in trading volumes that began on March 28. The lender said the statement was made at the request of the bourse. The Apple Daily newspaper reported yesterday that the family may confirm a potential disposal of a controlling interest in the bank. The family holds 60 per cent of the lender. "The board would like to confirm that it is not aware of any negotiations or agreements relating to any disposal of controlling interest in the bank by its controlling shareholders," the Chong Hing board said. Stock prices of other family-owned local banks including Dah Sing Bank, Wing Hang Bank and Bank of East Asia also rallied yesterday. "Chong Hing is paving the way for them to sell. The family is looking to sell at a price of at least two times price-to-book. That is why despite all the talk a final deal has failed to materialise. They want a good price," said a fund manager who declined to be named. China Merchants Bank paid US$4.7 billion for the Wu family's Wing Lung Bank in 2009. The deal was about 2.9 times price-to-book value at that time. Chong Hing would help its shareholders by making good use of opportunities, including potential acquisition, co-operation or merger deals, chief executive Felton Lau Wai-man said last month. Takeover speculation has been mounting since November, when Lau took up his position, replacing Liu Lit-chi, a member of the founding family who spent more than 50 years at the bank. The sale of Chong Hing Bank shares to people outside the Liu family is limited by a deed that the bank's founder instituted in 1972. The deed says if a Liu family member wants to sell his shares, existing shareholders have the right of first refusal.