Oversea-Chinese Banking Corp (OCBC), the second-largest banking group in Singapore by assets, has bid HK$38.4bn ($5bn) to buy family-owned Wing Hang Bank.
The offer amounts to the largest takeover of a Hong Kong lender since DBS Group, OCBC’s largest competitor in Singapore, offered $3.5bn for Dao Heng Group in April 2001.
OCBC will pay HK$125 a share in cash, representing a 1.6% premium to the last traded price on March 28, it said in a statement.
According to the release, shareholders including Bank of New York Mellon and the family of chairman Patrick Fung, with a combined 50.66% stake of Wing Hang, have accepted the offer.
Wing Hang bank’s investors will receive a dividend of up to 46 HK cents per share if the takeover is approved by shareholders, according to the statement.
OCBC CEO Samuel Tsien, said: "The deal ultimately will also depend on whether the other shareholders will accept this price or not.
"We are of the opinion that the price to be paid if fair and equitable," he added.
Wing Hang provides OCBC a network of around 70 branches spanning Hong Kong, Macau and mainland China.
The acquisition will put OCBC "in a position to capitalise on increasing trade, capital and wealth flows between Greater China and Southeast Asia," the companies said in the statement.
Goldman Sachs, KPMG and Nomura Holdings are advising Wing Hang, while Bank of America Merril Lynch is working with OCBC.