Thaihot's $1.4 bln HK insurance deal looks fiery

Dah Sing Financial Holdings

03/06/2016 05:54

(The author is a Reuters Breakingviews columnist. The opinions 
expressed are her own.) 
    By Rachel Morarjee 
    BEIJING, June 3 (Reuters Breakingviews) - The little-known 
Chinese group has paid almost double recent valuations for local 
bank Dah Sing's insurance unit after a fierce auction. The deal 
is part of a drive to diversify from property. But China's 
currency controls may interfere with efforts to attract mainland 
customers. 
 
    Full view will be published shortly. 
     
    CONTEXT NEWS 
    - Dah Sing Financial Holdings said on June 3 that it was 
selling its insurance business to China's Thaihot Group for a 
total of around HK$10.5 billion ($1.4 billion). 
    - Thaihot is paying HK$8 billion in cash for Dah Sing's Hong 
Kong and Macau insurance units. It will pay another HK$2.5 
billion in cash for the exclusive rights to distribute insurance 
through Dah Sing's banking network. In addition, Thaihot will 
also pay Dah Sing interest of 2.5 percent of the acquisition 
price from the beginning of the year until the deal closes. 
    - The deal values Dah Sing's Hong Kong and Macau insurance 
businesses at almost 7 times their total net asset value of HK$ 
1.54 billion at the end of December. 
    - By early afternoon in Hong Kong, shares in Dah Sing 
Financial Holdings were up 3 percent at HK$51.65. 
    - Reuters: Dah Sing to sell insurance unit to China's 
Thaihot for $1.4 bln  urn:newsml:reuters.com:*:nL4N18U3M2 
    - Dah Sing HK Stock Exchange Announcement: http://bit.ly/1Uj1GO6 
 
     
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    - For previous columns by the author, Reuters customers can 
click on  MORARJEE/  
 
  
 
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 (On Twitter https://twitter.com/morarjee Editing by Peter Thal 
Larsen and Katrina Hamlin) 
 ((rachel.morarjee@thomsonreuters.com;)(Reuters Messaging: 
rachel.morarjee.thomsonreuters.com@reuters.net)) 
 
Keywords: DAH SING EQUITY/THAIHOT GROUP BREAKINGVIEWS