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|Thursday, April 12, 2001, updated at 11:29(GMT+8)|
DBS Group in Deal to Acquire Controlling Stake in Dao Heng BankDevelopment Bank of Singapore (DBS), Southeast Asia's largest bank, said Wednesday it would pay up to 41.92 billion Hong Kong dollars (US$5.4 billion) to buy a 71.3 percent stake in Dao Heng Bank from the Malaysian Guoco Group.
The Singapore government-controlled DBS bank said at a press conference that it will also make a general offer to buy out the minority shareholders to gain a 100 percent control of the Hong Kong-listed Dao Heng Bank.
Under the DBS offer, Dao Heng shareholders will have the choice of accepting either 60.14 HK dollars (about US$7.715) per Dao Heng share, the Cash Option, or a package of 43.26 HK dollars (about US$5.55) in cash plus one new DBS share, the Cash and Share Option.
Guoco Group has agreed to take the Cash and Share Option.
Assuming all other shareholders take the Cash Option, DBS would acquire an effective 80 percent stake in Dao Heng with Dao Heng holding the remaining 20 percent.
If other shareholders accept the Cash and Share Option, DBS would acquire an effective 72 percent interest in Dao Heng.
The offer is yet subject to shareholder and regulatory approval, with the Guoco Group making a commitment to sell, DBS said.
DBS, which privatized Hong Kong's Kwong On Bank in 1999, said the latest acquisition will help it expand in the region, particularly in the opening Chinese mainland market.
The bank's assets as a percentage of total will increase to 30 percent following the transaction, from 9 percent. And the new bank will be the fourth-biggest in Hong Kong by assets.
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