Public Bank Bhd (PBB) has proposed to privatise its Hong Kong-listed subsidiary Public Financial Holdings Ltd (PFHL) by acquiring the remaining 26.77% it does not own for about HK$734.75 million (RM378.6 million) in cash, paving the way for PFHL’s delisting from the Hong Kong Stock Exchange (HKSE).
The banking group said it intends to undertake the privatisation through a scheme of arrangement under Bermuda’s Companies Act.
Public Bank currently owns 804.02 million PFHL shares, representing a 73.23% stake, while the remaining 293.90 million shares, or 26.77%, are held by other shareholders.
Under the proposed scheme, Public Bank will pay HK$2.50 in cash for each scheme share, equivalent to approximately RM1.29 based on the exchange rate stated in the announcement.
This implies a total cash consideration of approximately HK$734.75 million, or RM378.6 million, for the shares Public Bank does not already own.
If the scheme becomes effective, all scheme shares will be cancelled and an equivalent number of new PFHL shares will be issued to Public Bank, resulting in PFHL becoming a wholly-owned subsidiary of the Malaysian banking group.
PFHL will subsequently apply to withdraw the listing of its shares from the Main Board of the HKSE.
Public Bank said the proposal provides minority shareholders with an opportunity to realise their entire investment immediately in cash at what it considers an attractive premium to PFHL’s historical trading prices.
It also allows shareholders to exit their holdings at the same price without being exposed to market fluctuations or the potential price impact associated with disposing of large blocks of shares in the open market.
PFHL shares have experienced relatively low trading liquidity. During the 12 months up to and including the last trading day, average daily trading volume represented only about 0.027% of its total issued shares, with average daily turnover of approximately HK$414,000.
Public Bank said this could make it difficult for shareholders with sizeable holdings to dispose of their investments quickly without potentially affecting PFHL’s market price.
As at the latest practicable date, PFHL had 1.098 billion issued and fully paid shares with a par value of HK$0.10 each.
The privatisation remains subject to several conditions, including approval by PFHL’s scheme shareholders at a court-convened meeting and sanction by the Supreme Court of Bermuda, alongside other applicable regulatory requirements.
Among the voting thresholds, the scheme must receive approval from a majority in number of scheme shareholders present and voting, representing at least three-fourths in value of the scheme shares voted at the court meeting. It must also secure at least 75% of votes cast by disinterested scheme shareholders, subject to the applicable takeover rules.
The conditions must be fulfilled or, where permitted, waived by March 8, 2027, unless the long-stop date is subsequently extended in accordance with the relevant requirements.
Upon the scheme becoming effective, Public Bank said the cash consideration would be paid to eligible scheme shareholders as soon as possible and no later than seven business days after the effective date.
