SINGAPORE, April 1 (Reuters) - Oversea-Chinese Banking Corp Ltd, Singapore’s second-biggest lender, made a formal offer to buy Hong Kong’s Wing Hang Bank Ltd for a slightly lower than expected HK$38.428 billion ($4.95 billion).
It is offering HK$125 a share to buy all shares of Wing Hang, according to a joint announcement, after having reached a deal with the bank’s biggest shareholder to purchase a nearly 45 percent stake.
The offer price is below earlier expectations, with sources previously estimating the deal could be worth $5.3 billion.
The offer price translates to a book value of 1.77 times for Wing Hang Bank based on its book as of Dec. 31.
The deal will give OCBC a much sought-after gateway to China and help bridge the gap with bigger Singapore rival DBS Group Holdings, which operates Hong Kong’s fifth-biggest bank.
OCBC will purchase the stake from members of Wing Hang’s founding Fung family, their affiliates and related family trusts, and BNY International Financing Corp.
Share trading in OCBC and Wing Hang was suspended on Friday ahead of the announcement.
$1 = 7.7571 Hong Kong Dollars Reporting by Saeed Azhar; Editing by Richard Pullin