HSBC (5 HK)'s Fair Offer for Hang Seng (11 HK)'s Minorities

• Hang Seng Bank (11 HK) has announced an Offer from controlling parent (63.3551%), HSBC Holdings (5 HK), by way of a Scheme, in a HK$106bn (US$13.6bn) deal.

• The Scheme Consideration is HK$155/share, a 30.3% premium to last close. The price is final. A “third interim dividend” will be added. Optically, the price is bang on.

• The long stop for conditions is the 30th September 2026. I think this transaction can be wrapped up in around five months.

The Trade:

• Assuming five months to complete, pay up to HK$148/share for a 15% annualised return. Including a third interim dividend of HK$1.20/share.