Insight & Analysis

Press release: Standard Chartered shares in retreat after First Abu Dhabi Bank quashes takeover rumours

Published: Feb 2023

Susannah Streeter, head of money and markets, Hargreaves Lansdown: “Given that Standard Chartered has such a large footprint in emerging markets with its operations in 59 countries, and is highly active across the Middle East, it’s clear why speculation about a First Abu Dhabi Bank takeover reached fever pitch given the opportunities presented. However, there are still risks ahead, given that the group has large exposure to commercial real estate debt in China, with related impairment charges chipping away at profit’s full potential. Although this may be part of the reason why FAD is for now steering clear, it’s also likely to be down to takeover rules. After FAB first announced in January it was stepping away from any offer, a six-month cooling off period kicked in, which means it is not meant to do any more deal work.

10th February 2023

  • First Abu Dhabi Bank has re-iterated that it is not evaluating a possible offer for Standard Chartered.
  • It comes after rumours swirled this week that a bid will emerge.
  • Shares fell back 6% in early trade, but there is still speculation the deal will go through.

Susannah Streeter, head of money and markets, Hargreaves Lansdown:

“Given that Standard Chartered has such a large footprint in emerging markets with its operations in 59 countries, and is highly active across the Middle East, it’s clear why speculation about a First Abu Dhabi Bank takeover reached fever pitch given the opportunities presented. However, there are still risks ahead, given that the group has large exposure to commercial real estate debt in China, with related impairment charges chipping away at profit’s full potential. Although this may be part of the reason why FAD is for now steering clear, it’s also likely to be down to takeover rules. After FAB first announced in January it was stepping away from any offer, a six-month cooling off period kicked in, which means it is not meant to do any more deal work.

Although the share price has fallen back, it remains highly elevated, far above the level it was before rumours began swirling at the start of the year. There clearly is a great deal of speculation that First Abu Dhabi may move again, once the cooling off period ends in July. There are still plenty of question marks surrounding a full takeover. It would be a very big undertaking, because the huge and intricate footprint means a mammoth amount of regulatory work would be needed to complete on any deal.”

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