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Thai Billionaire Reaps HK$12 Billion From Ping An Stake

Thai billionaire Dhanin Chearavanont
Dhanin Chearavanont, chairman of Charoen Pokphand Foods Pcl, is seen on Jan. 20, 2012. Photographer: Dario Pignatelli/Bloomberg

Thai billionaire Dhanin Chearavanont stands to make at least HK$12 billion ($1.5 billion) of profit from his purchase of a stake in Ping An Insurance (Group) Co., China’s second-largest insurer, from HSBC Holdings Plc.

Ping An’s shares fell 2.8 percent to close at HK$68.90 in Hong Kong today, compared with the HK$59 per share Dhanin’s Charoen Pokphand Group Co. agreed to pay for the 1.2 billion shares.

“It’s a pretty profitable trade for Charoen Pokphand,” said Olive Xia, Shanghai-based analyst at Core Pacific-Yamaichi International Ltd. “For Ping An, the approval removed uncertainty over the deal.”

Hong Kong shares of Ping An, which is also listed in Shanghai, have gained about 20 percent from the HK$57.65 closing price on Dec. 4, the day before the sale was announced. Ping An’s stock has advanced as improving global and Chinese macroeconomic outlooks lifted the Hang Seng China Enterprises Index, which tracks China-incorporated companies listed in Hong Kong, 16 percent since Dec. 4.

HSBC announced on Dec. 5 the planned sale of the 15.6 percent stake in Ping An in two phases for about $9.4 billion. The first installment of 256.7 million shares was transferred on Dec. 7, according to a HSBC statement on Feb. 1.

Ping An’s Hong Kong shares lost 2.8 percent today following the announcement after market closing on Feb. 1 that China Insurance Regulatory Commission had cleared HSBC to sell the remaining 976.1 million shares to Charoen Pokphand. It declined the most since Jan. 8, the day when China’s Caixin magazine reported on its Website that China Development Bank Corp. halted HK$44 billion loans to help finance Charoen Pokphand’s purchase.

Charoen Pokphand has paid for the second batch of shares in cash and the deal is expected to be completed on Feb. 6, HSBC said in the statement.

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