OCBC falls on fears over Wing Hang purchase price

Shares in Oversea-Chinese Banking Corp fell to a near four-week low in Singapore yesterday amid concern it may pay too much to take over Wing Hang Bank.

Wing Hang's biggest shareholders agreed to "engage exclusively" with Singapore-based OCBC until January 31 to complete the terms of a possible offer, Hong Kong's second-largest family-run lender said in a statement to the city's stock exchange on Monday. No financial details were disclosed.

OCBC chief financial officer Darren Tan yesterday said the firm's key aims were tapping into the offshore yuan market and building a customer franchise in Hong Kong, Macau and Taiwan.

Wing Hang, which has 70 branches in Hong Kong, Macau and on the mainland, has a market value of HK$36.2 billion.

Wing Hang and OCBC, Southeast Asia's No2 lender, had reached a consensus on a price range for the takeover, a person familiar with the matter told the South China Morning Post.

If the final price is set at 1.8 times Wing Hang's book value - as speculation has suggested an offer would come in at less than two times book value - OCBC would have to pay HK$36.7 billion for its 307.4 million shares, translating into HK$119.52 per share.