Anbang Insurance Group, the Chinese insurer said to be balking at the asking price for Hong Kong’s Wing Hang Bank Ltd., bought a 13.6 billion yuan ($2.2 billion) stake in China Merchants Bank Co.
Anbang purchased 1.13 billion Shanghai-traded shares of China Merchants Bank at an average price of 12.07 yuan each, raising its stake to about 5 percent, according to a Shanghai exchange filing today.
“Judging by the size of the investment, this is more than a portfolio investment,” Du Changchun, an analyst at Northeast Securities Co. in Shanghai, said by telephone. “The group might have a larger plan in mind. This is probably a step toward building a comprehensive financial platform that covers banking, insurance and securities.”
Anbang last week indicated it won’t pay more than 1.7 times the book value of Wing Hang, the second-largest family-run Hong Kong lender, two people with knowledge of the matter said at that time. That’s less than the 2 times book value that’s being sought, the people said. Shares of Wing Hang fell for a fourth day in Hong Kong.
Phone calls to Beijing-based Anbang’s media relations department weren’t returned today. The company’s property and casualty insurance unit made the acquisition.
Anbang said last week it increased its stake in Gemdale Corp., a Shenzhen-based residential developer, to 5 percent. Anbang’s property and casualty insurance unit bought 4.5 million Gemdale shares, worth 27.7 million yuan, according to a Dec. 3 exchange filing from the property company.
Shares of China Merchants Bank, the nation’s sixth-largest lender by market value, fell 1.4 percent to HK$15.86 in Hong Kong as the benchmark Hang Seng Index dropped 1.7 percent.
Wing Hang shares lost 1.4 percent to HK$111.10, the lowest close since Nov. 27.
The bank also drew interest from Singapore’s Oversea-Chinese Banking Corp. and Canada’s Bank of Nova Scotia, people with knowledge of the process have said. The Hong Kong lender, with a market value of $4.4 billion, has a network of 70 branches spanning the city, Macau and mainland China.