Standard Chartered shares jump on reports UAE bank reconsidering takeover bid
First Abu Dhabi Bank could be reconsidering a takeover offer for the London-listed banking giant worth up to 35 billion dollars, reports said.
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Your support makes all the difference.Shares in global bank Standard Chartered have jumped by about a tenth as fresh reports emerged that the largest bank in the United Arab Emirates could be reconsidering a multi-billion dollar takeover offer.
First Abu Dhabi Bank (FAB) said in December that it had been mulling a takeover bid, but that the possible offer had been abandoned.
On Thursday, it emerged that FAB could again be considering a bid for the London-listed banking giant worth 30 to 35 billion US dollars (£24.7 billion to £28.8 billion), according to reports from Bloomberg.
Standard Chartered declined to comment and FAB could not immediately be reached for comment.
But the speculation alone was enough to send its shares jumping by more than 10% during the day.
International businesses and investors have been looking towards the UK market over the last year as an attractive geography in the search for potential takeover targets, given the depreciation of the pound since the May 2021 peak
Standard Chartered’s share price had soared by more than a fifth in December as investors were buoyed by the potential deal, despite being told that any initial talks had collapsed.
FAB said that it has the right to make an offer in the future.
However, under UK and Hong Kong takeover rules, it would have to wait six months unless it received the agreement of the board or if another company announces an offer.
Asia-focused Standard Chartered is an attractive business for companies eyeing up expansion, with a global reach spanning 59 countries and territories in Europe and the Americas, Asia, the Middle East and Africa, while it is head-quartered in London.
It has reportedly been eyed up for a takeover by banks in the past although a deal has never materialised.
Victoria Scholar, head of investment at Interactive Investor, suggested that UK firms have been going more cheaply than usual in recent months due to the declining value of the pound.
She said: “International businesses and investors have been looking towards the UK market over the last year as an attractive geography in the search for potential takeover targets, given the depreciation of the pound since the May 2021 peak and the corresponding increased attractiveness of sterling-priced valuations.
“The recent revival of the pound could spur investors to move quickly as valuations become richer again.”
Russ Mould, investment director at AJ Bell, echoed the sentiment that UK stocks are hot picks for international investors in the current climate.
He said: “Reports suggest First Abu Dhabi Bank is still interested in buying Standard Chartered, despite guidance to the contrary last month.
“If successful, it would represent yet another UK stock acquired by a foreign player.
“It would also play to the theory that industry players are more likely to buy UK-listed companies than private equity in the current environment.”
Standard Chartered’s share price has surged by nearly a quarter over the last six months.