REG - HSBC Holdings PLC - Proposal for the privatisation of Hang Seng Bank
09/10/2025 07:00
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RNS Number : 6456C HSBC Holdings PLC 09 October 2025
This announcement is for information purposes only and does not constitute, or
form part of, any invitation or offer to acquire, purchase or subscribe for
any securities of HSBC Holdings, HSBC Asia Pacific or Hang Seng Bank, nor is
it an invitation or offer to or a solicitation of any offer to acquire,
purchase or subscribe for securities of HSBC Holdings, HSBC Asia Pacific or
Hang Seng Bank, or the solicitation of any vote or approval in any
jurisdiction, nor shall there be any sale, issuance or transfer of securities
of HSBC Holdings, HSBC Asia Pacific or Hang Seng Bank in any jurisdiction in
contravention of applicable law. This announcement is not for release,
publication or distribution, in whole or in part, in or into or from any other
jurisdiction where to do so would constitute a violation of the relevant laws
or regulations of such jurisdiction.
HSBC Holdings plc Hang Seng Bank Limited
(Hong Kong Stock Code: 5) (Stock Codes: 11 (HKD Counter) and 80011 (RMB Counter))
The Hongkong and Shanghai Banking Corporation Limited
JOINT ANNOUNCEMENT
(1) PROPOSAL FOR THE PRIVATISATION OF HANG SENG BANK LIMITED
BY THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED
BY WAY OF A SCHEME OF ARRANGEMENT
UNDER SECTION 673 OF THE COMPANIES ORDINANCE
(2) PROPOSED WITHDRAWAL OF LISTING OF HANG SENG BANK SHARES
AND
(3) DISCLOSEABLE TRANSACTION OF HSBC HOLDINGS PLC IN RELATION TO THE PROPOSAL
Joint Financial Advisers to HSBC Holdings and HSBC Asia Pacific Financial Adviser to Hang Seng Bank
(in alphabetical order)
BofA Securities Goldman Sachs Morgan Stanley
Financial Adviser to HSBC Asia Pacific
The Hongkong and Shanghai Banking Corporation Limited
1. THE PROPOSAL
HSBC Asia Pacific, as the offeror, has requested the Hang Seng Bank Board to
put forward the Proposal to the Scheme Shareholders for the privatisation of
Hang Seng Bank by way of a scheme of arrangement under Section 673 of the
Companies Ordinance.
If the Scheme becomes effective, the Scheme Shares will be cancelled in
consideration for the Scheme Consideration of HK$155.00 in cash (less the
Dividend Adjustment Amount, if any) for every Scheme Share held.
Hang Seng Bank Shareholders will receive the 2025 Third Interim Dividend which
will not be deducted from the Scheme Consideration. All other dividends
declared by Hang Seng Bank after the date of this announcement with a record
date before the Scheme Effective Date will be deducted from the Scheme
Consideration.
The Scheme Consideration will not be increased and neither HSBC Holdings nor
HSBC Asia Pacific reserves the right to do so.
2. INTENTIONS OF HSBC HOLDINGS AND HSBC ASIA PACIFIC IN RELATION TO THE
HANG SENG BANK GROUP
Hang Seng Bank has been rooted in Hong Kong for close to 100 years and has a
distinctive legacy. HSBC intends to continue to respect the legacy of Hang
Seng Bank and to serve Hong Kong through both the HSBC and Hang Seng Bank
brands. As such, Hang Seng Bank will retain its separate authorization as a
licensed bank under the Hong Kong Banking Ordinance with its own governance,
brand, distinct customer proposition and a branch network.
Moreover, HSBC is aware of the important role that Hang Seng Bank plays in the
local community and will continue to support the community projects of which
Hang Seng Bank has been a supporter.
For details, please refer to the section headed "II. Intentions of HSBC
Holdings and HSBC Asia Pacific in relation to the Hang Seng Bank Group" in
this announcement.
3. TERMS OF THE PROPOSAL
If the Proposal is implemented, all the Scheme Shares (which will be all the
Hang Seng Bank Shares other than the HSBC Asia Pacific Non-Scheme Shares) in
issue on the Scheme Record Date will be cancelled, in exchange for the payment
by HSBC Asia Pacific to each Scheme Shareholder of the Scheme Consideration
(less the Dividend Adjustment Amount, if any) for each Scheme Share cancelled.
The issued share capital of Hang Seng Bank will then be restored to the amount
immediately prior to such cancellation by the issue by Hang Seng Bank to HSBC
Asia Pacific (or its nominee) of such number of new Hang Seng Bank Shares as
is equal to the number of Scheme Shares cancelled. As such, upon the Scheme
becoming effective, Hang Seng Bank will become a wholly-owned subsidiary of
HSBC Holdings.
It is intended that the listing of the Hang Seng Bank Shares on the Hong Kong
Stock Exchange will be withdrawn subject to the Scheme becoming effective.
Conditions precedent to the Proposal
The Proposal is subject to certain conditions precedent, including, amongst
others, the requisite approval of the Scheme at the Hang Seng Bank Court
Meeting by the Scheme Shareholders in accordance with the Companies Ordinance
and the Takeovers Code, and the sanctioning of the Scheme by the High Court.
The Conditions shall be satisfied or (if applicable) waived on or before the
Conditions Long-Stop Date in order for the Proposal to be implemented.
For details, please refer to "F. Conditions to the Proposal and the Scheme" of
the section headed "V. Terms of the Proposal" in this announcement.
Financial resources of HSBC Asia Pacific for the Scheme Consideration
HSBC Asia Pacific intends to finance the entire amount of the Scheme
Consideration payable to the Scheme Shareholders under the Proposal from the
internal resources of the HSBC Group.
BofA Securities and Goldman Sachs, as joint financial advisers to HSBC
Holdings and HSBC Asia Pacific in connection with the Proposal, are satisfied
that sufficient financial resources are available to HSBC Asia Pacific to
satisfy the Scheme Consideration payable to the Scheme Shareholders under the
Proposal.
4. FINANCIAL IMPACT ON HSBC GROUP
HSBC expects the Proposal to be accretive to earnings per ordinary share as a
result of the removal of the minority interest earnings deduction related to
Hang Seng Bank. HSBC continues to target a dividend payout ratio for 2025 of
50% of earnings per ordinary share excluding material notable items and
related impacts. HSBC's latest published CET1 ratio is 14.6% as at 30 June
2025. Based on analysis as at 30 June 2025, the expected day 1 capital impact
of the Proposal is approximately 125bps. HSBC expects to restore its CET1
ratio to its target operating range of 14.0%-14.5% through a combination of
organic capital generation and not initiating any further buybacks for three
quarters following the date of this announcement. A decision to recommence
buybacks will be subject to HSBC's normal buyback considerations and process
on a quarterly basis.
5. HONG KONG AND UK LISTING RULES IMPLICATIONS FOR HSBC HOLDINGS
The Proposal constitutes a discloseable transaction of HSBC Holdings, and is
expected to constitute a fully exempt connected transaction of HSBC Holdings,
under the Hong Kong Listing Rules. The Proposal does not constitute a
"significant transaction" under the UK Listing Rules.
6. INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER OF HANG
SENG BANK
The Hang Seng Bank Board has formed the Hang Seng Bank IBC (comprising
Cordelia Chung, Clement Kwok King Man, Patricia Lam Sze Wan, Lin Huey Ru and
Wang Xiao Bin, all being independent non-executive directors of Hang Seng
Bank) in accordance with the requirements of the Takeovers Code. The Hang Seng
Bank IBC will make a recommendation (i) as to whether the Proposal is, or is
not, fair and reasonable and (ii) as to voting.
The Hang Seng Bank IFA will be appointed by the Hang Seng Bank Board (with the
approval of the Hang Seng Bank IBC) in due course to advise the Hang Seng Bank
IBC on the Proposal. A further announcement will be made after the appointment
of the Hang Seng Bank IFA.
7. SCHEME DOCUMENT
A Scheme Document including, among other things, further details of the
Proposal, an explanatory statement, the expected timetable relating to the
Proposal, the recommendation of the Hang Seng Bank IBC, the letter of advice
from the Hang Seng Bank IFA and notices of the Hang Seng Bank Court Meeting
and the Hang Seng Bank General Meeting is required to be despatched to the
Hang Seng Bank Shareholders within 21 days after the date of this announcement
pursuant to Rule 8.2 of the Takeovers Code, unless the Executive's consent is
otherwise obtained.
In light of the time required for the preparation of the Scheme Document and
the procedures of the High Court in respect of the Scheme, HSBC Asia Pacific
and Hang Seng Bank will apply to the Executive pursuant to Rule 8.2 of the
Takeovers Code for its consent to extend the time limit for the despatch of
the Scheme Document. Further announcement(s) will be made in respect of the
despatch of the Scheme Document if and when appropriate in accordance with the
Takeovers Code, the Hong Kong Listing Rules and applicable laws and
regulations.
8. INSIDE INFORMATION
This announcement contains inside information for HSBC Holdings and Hang Seng
Bank pursuant to the Inside Information Provisions (as defined in the Hong
Kong Listing Rules) under Part XIVA of the Securities and Futures Ordinance
(Chapter 571 of the Laws of Hong Kong). This announcement also contains inside
information for HSBC Holdings for the purposes of Article 7 of the Market
Abuse Regulation (EU) No 596/2014 (as it forms part of domestic law of the
United Kingdom by virtue of the European Union (Withdrawal) Act 2018, as
amended).
WARNING: Shareholders and/or potential investors of HSBC Holdings and Hang
Seng Bank should be aware that the Proposal will only be implemented if all
the Conditions are satisfied or (if applicable) waived on or before the
Conditions Long Stop Date. Shareholders and/or potential investors of HSBC
Holdings and Hang Seng Bank should therefore exercise caution when dealing in
the securities of HSBC Holdings and Hang Seng Bank respectively. Persons who
are in doubt as to the action they should take should consult their licensed
securities dealer, registered institution in securities, bank manager,
solicitor and/or other professional adviser.
I. INTRODUCTION
HSBC Holdings, HSBC Asia Pacific and Hang Seng Bank jointly announce that HSBC
Asia Pacific, as the offeror, has requested the Hang Seng Bank Board to put
forward the Proposal to the Scheme Shareholders for the privatisation of Hang
Seng Bank by way of a scheme of arrangement under Section 673 of the Companies
Ordinance.
The Scheme will provide that, if it becomes effective, the Scheme Shares will
be cancelled in consideration for the Scheme Consideration, being a cash
payment of HK$155.00 (less the Dividend Adjustment Amount, if any), for every
Scheme Share held.
Hang Seng Bank Shareholders will receive the 2025 Third Interim Dividend,
which will not be deducted from the Scheme Consideration. All other dividends
declared by Hang Seng Bank after the date of this announcement with a record
date before the Scheme Effective Date will be deducted from the Scheme
Consideration.
II. INTENTIONS OF HSBC HOLDINGS AND HSBC ASIA PACIFIC IN RELATION
TO THE HANG SENG BANK GROUP
Hang Seng Bank has been rooted in Hong Kong for close to 100 years. HSBC
intends to respect that legacy. Hang Seng Bank's heritage, brand and distinct
culture is a competitive advantage. As such, post privatisation, Hang Seng
Bank will retain its separate authorization as a licensed bank under the Hong
Kong Banking Ordinance with its own governance, brand, distinct customer
proposition and a branch network.
Moreover, HSBC is aware of the important role that Hang Seng Bank plays in the
local community and will continue to support the community projects of which
Hang Seng Bank has been a supporter.
One of HSBC's strategic priorities is to grow in Hong Kong. HSBC believes it
is best positioned to do so by strengthening the Hong Kong banking presence of
both HSBC Asia Pacific and Hang Seng Bank, focusing on their relative
strengths and competitive advantages, but continuing to allow all customers to
choose where to bank. HSBC intends to continue to invest in people and
technology across both HSBC Asia Pacific and Hang Seng Bank as part of that.
At the same time, HSBC also expects there to be an opportunity to create
greater alignment across HSBC and Hang Seng Bank that may result in better
operational leverage and efficiencies. The changes necessary to effect such
alignment will be made over time.
III. HSBC HOLDINGS' AND HSBC ASIA PACIFIC'S REASONS FOR AND BENEFITS OF
THE PROPOSAL
(a) The Proposal offers Scheme Shareholders an opportunity to realise
their investment with immediate cash proceeds at a significant premium to
historical trading prices and market trading level.
The Scheme Consideration represents:
· an implied P/B (price-to-book) multiple significantly above
Hong Kong Comparable Peers:
o Implied 1H25A P/B 1.8x (actual and unaudited) vs. Hong Kong Comparable
Peers median (0.4x);
· a premium of approximately 30.3% over the closing price of
HK$119.00 per Hang Seng Bank Share as quoted on the Hong Kong Stock Exchange
on the Last Trading Day;
· a premium of approximately 18.3% relative to the highest
price target of HK$131.00 and a premium of approximately 41.6% relative to the
median price target of HK$109.50 issued by research analysts covering Hang
Seng Bank after its interim results announcement for the six months ended 30
June 2025; 1
· a premium of approximately 33.1% over the average closing
price of HK$116.49 per Hang Seng Bank Share as quoted on the Hong Kong Stock
Exchange over the last 30 trading days up to and including the Last Trading
Day;
· a premium of approximately 48.6% over the average closing
price of HK$104.30 per Hang Seng Bank Share as quoted on the Hong Kong Stock
Exchange over the last 360 trading days up to and including the Last Trading
Day;
· a premium of approximately 25.5% to Hang Seng Bank's 52-week
high share price of HK$123.50 as of 28 July 2025; and
· a price which is more than the highest Hang Seng Bank share
price of HK$154.00 as quoted on the Hong Kong Stock Exchange since March 2022.
HSBC Holdings and HSBC Asia Pacific believe that the Scheme Consideration
represents a substantial premium to the market price of Hang Seng Bank Shares
and reflects the potential value of the development of the business of Hang
Seng Bank in the next few years and provides an opportunity for the Scheme
Shareholders to realise their investments immediately.
(b) The Proposal respects Hang Seng Bank's heritage, brand and
distinct culture whilst enhancing its customer proposition.
Hang Seng Bank was established in 1933 and is one of the largest domestic
banks in Hong Kong, with a leading retail and commercial banking franchise.
Hang Seng Bank's heritage, brand and distinct culture is a competitive
advantage. As such, post privatisation, Hang Seng Bank will retain its
separate authorization as a licensed bank under the Hong Kong Banking
Ordinance with its own governance, brand, distinct customer proposition and a
branch network.
Beyond its economic impact, Hang Seng Bank is also deeply embedded in the
local community. Hang Seng Bank is a major contributor to community
initiatives, supporting education, environmental protection, arts, sports, and
culture, which HSBC is committed to continuing supporting.
The privatisation will not change Hang Seng Bank's customers' day-to-day
interactions with Hang Seng Bank. They will retain their bank account details
and relationship managers, where applicable. In addition, Hang Seng Bank's
customers will have the added benefit of greater access to HSBC's full product
suite and global network. Post privatisation, HSBC also intends to deploy
technology investment across both brands at scale and in tandem, which will
deliver efficiency and innovation for customers.
HSBC will continue to invest strategically in human capital in Hang Seng Bank.
Hang Seng Bank's staff will also have access to greater talent development
with training and job opportunities available to HSBC staff.
In addition, Hang Seng Bank will have the benefit of HSBC's global financial
resources, capital management and market access.
(c) The Proposal represents a significant investment into Hong
Kong, demonstrating HSBC's long-term commitment to Hong Kong as a home market.
The privatisation exercise represents a significant investment into Hong Kong.
It represents HSBC's strong conviction in Hong Kong's future as a leading
global financial centre and super-connector between international markets and
Mainland China.
HSBC will continue to invest in people and technology, including deploying
technology investment across both brands at scale. Further, HSBC believes that
the Proposal will also unlock opportunities for further investment across HSBC
Asia Pacific and Hang Seng Bank which is expected to lead to further growth in
its Hong Kong business, which will benefit Hong Kong as a whole.
(d) The Proposal is in line with HSBC's strategic priority of
growing its business in Hong Kong and becoming more simple and agile. The
privatisation will enable HSBC to better capitalise on growth opportunities in
Hong Kong, fully utilising both the HSBC Asia Pacific and Hang Seng Bank
franchises.
Hong Kong is one of HSBC's home markets and a strategic priority. HSBC
believes that the fundamentals of the Hong Kong economy are strong, and there
are significant growth opportunities available over the medium term. It
represents a compelling opportunity to deploy capital for growth for the HSBC
Group. But it is also an increasingly competitive market that will require
both HSBC Asia Pacific and Hang Seng Bank to be better aligned and able to
respond quickly to market and customer needs.
By privatising Hang Seng Bank, HSBC can greatly simplify the structure of its
Hong Kong operations, further align the economic incentives for HSBC to
increase its investments in Hang Seng Bank, leveraging both brands whilst
simplifying and streamlining decision-making processes to be more agile. It
will also enable improved operational risk management and capital efficiency
and deployment. Furthermore, there is an opportunity for better alignment of
Hang Seng Bank and HSBC's operations that may result in better operational
leverage and efficiencies.
Together, these changes will improve HSBC's ability to take advantage of
growth opportunities in Hong Kong, by availing itself of the distinct
strengths of both the HSBC Asia Pacific and Hang Seng Bank brands, whilst also
delivering operating leverage.
IV. FINANCIAL IMPACT ON HSBC GROUP
HSBC expects the Proposal to be accretive to earnings per ordinary share as a
result of the removal of the minority interest earnings deduction related to
Hang Seng Bank. HSBC continues to target a dividend payout ratio for 2025 of
50% of earnings per ordinary share excluding material notable items and
related impacts. HSBC's latest published CET1 ratio is 14.6% as at 30 June
2025. Based on analysis as at 30 June 2025, the expected day 1 capital impact
of the Proposal is approximately 125bps which would arise following the
approval of the relevant resolutions by the requisite majority at each of the
Hang Seng Bank Court Meeting and the Hang Seng Bank General Meeting. This
reflects around 165bps from the consideration paid less around 40bps from the
removal of the non-controlling interest regulatory capital deductions. HSBC
expects to restore its CET1 ratio to its target operating range of 14.0%-14.5%
through a combination of organic capital generation and not initiating any
further buybacks for three quarters following the date of this announcement. A
decision to recommence buybacks will be subject to HSBC's normal buyback
considerations and process on a quarterly basis.
V. TERMS OF THE PROPOSAL
If the Proposal is approved and implemented:
(a) all the Scheme Shares in issue on the Scheme Record Date will
be cancelled and extinguished on the Scheme Effective Date in exchange for the
payment by HSBC Asia Pacific to each Scheme Shareholder of the Scheme
Consideration of HK$155.00 (less the Dividend Adjustment Amount, if any) in
cash for each Scheme Share cancelled and extinguished;
(b) on the Scheme Effective Date, the issued share capital of Hang
Seng Bank will be reduced by the cancellation and extinguishment of the Scheme
Shares in issue on the Scheme Record Date and, immediately after such
cancellation, extinguishment and reduction, the issued share capital of Hang
Seng Bank will be restored to the amount immediately prior to such
cancellation, extinguishment and reduction by the issue by Hang Seng Bank to
HSBC Asia Pacific (or its nominee) of such number of new Hang Seng Bank Shares
(credited as fully-paid by applying the reserve created as a result of such
cancellation, extinguishment and reduction) as is equal to the number of the
Scheme Shares cancelled and extinguished on the Scheme Effective Date;
(c) Hang Seng Bank will become a wholly-owned subsidiary of HSBC
Holdings; and
(d) the listing of the Hang Seng Bank Shares on the Hong Kong Stock
Exchange will be withdrawn from the Hong Kong Stock Exchange in accordance
with Rule 6.15(2) of the Listing Rules.
HSBC Holdings and HSBC Asia Pacific have engaged BofA Securities and Goldman
Sachs as the joint financial advisers in connection with the Proposal. In
addition, HSBC Asia Pacific has engaged The Hongkong and Shanghai Banking
Corporation Limited 2 as its financial adviser in connection with the
Proposal.
A. Scheme Consideration
If the Scheme becomes effective, the Scheme Shares will be cancelled in
exchange for the Scheme Consideration, being a cash payment of HK$155.00 (less
the Dividend Adjustment Amount, if any), for every Scheme Share held.
The 2025 Third Interim Dividend is expected to be declared by the Hang Seng
Bank Board on 10 October 2025 and, subject to such declaration, Hang Seng Bank
will announce the amount and the expected payment date of, and the record date
for, the 2025 Third Interim Dividend. The 2025 Third Interim Dividend is
expected to be an ordinary course dividend and will not be conditional on the
Scheme having become effective. Hang Seng Bank Shareholders will receive the
2025 Third Interim Dividend without any deduction from the Scheme
Consideration.
The Scheme Consideration will not be increased and neither HSBC Holdings nor
HSBC Asia Pacific reserves the right to do so. Shareholders and potential
investors of Hang Seng Bank should be aware that, following the making of this
statement, neither HSBC Holdings nor HSBC Asia Pacific will be allowed to
increase the Scheme Consideration.
B. Comparison of Value
The Scheme Consideration, being a cash payment of HK$155.00 for every Scheme
Share (prior to taking into account any potential Dividend Adjustment Amount),
represents:
(a) a premium of approximately 30.3% over the closing price of
HK$119.00 per Hang Seng Bank Share as quoted on the Hong Kong Stock Exchange
on the Last Trading Day;
(b) a premium of approximately 33.1% over the average closing
price of HK$116.49 per Hang Seng Bank Share as quoted on the Hong Kong Stock
Exchange over the last 30 trading days up to and including the Last Trading
Day;
(c) a premium of approximately 48.6% over the average closing
price of HK$104.30 per Hang Seng Bank Share as quoted on the Hong Kong Stock
Exchange over the last 360 trading days up to and including the Last Trading
Day;
(d) a premium of approximately 72.1% over the audited consolidated
net asset value attributable to Hang Seng Bank Shareholders of approximately
HK$90.06 per Hang Seng Bank Share as at 31 December 2024; and
(e) a premium of approximately 70.9% over the unaudited
consolidated net asset value attributable to Hang Seng Bank Shareholders of
approximately HK$90.67 per Hang Seng Bank Share as at 30 June 2025.
During the six-month period immediately up to and including the Last Trading
Day, the highest closing price of the Hang Seng Bank Shares as quoted on the
Hong Kong Stock Exchange was HK$123.50 on 28 July 2025, and the lowest closing
price of the Hang Seng Bank Shares as quoted on the Hong Kong Stock Exchange
was HK$93.80 on 9 April 2025.
C. Basis for determining the Scheme Consideration
The Scheme Consideration has been determined on an arm's length basis taking
into account, among other things, the recent and historical trading prices of
Hang Seng Bank Shares, the publicly available financial information of Hang
Seng Bank and the other privatisation transactions in Hong Kong in recent
years.
Since the initial approach by HSBC to Hang Seng Bank, the parties have engaged
in discussions and the Scheme Consideration has been arrived at after three
rounds of improvement over the initial proposal from HSBC.
D. Value of the Proposal
As at the time of the publication of this announcement, there are
1,875,737,536 Hang Seng Bank Shares in issue, of which 684,880,165 will form
the Scheme Shares.
Based on the Scheme Consideration of HK$155.00 per Scheme Share, and (i) on
the basis that the 2,800,000 Hang Seng Bank Shares repurchased under the Hang
Seng Bank Share Buy-back Programme which are pending cancellation as at the
time of the publication of this announcement will be cancelled on or before
the publication of the Scheme Document; and (ii) assuming there are no further
changes in the number of Hang Seng Bank Shares from the time of the
publication of this announcement up to and including the Scheme Record Date
and there is no Dividend Adjustment Amount:
(a) the Proposal values the entire issued share capital of Hang
Seng Bank 3 at approximately HK$290,305 million; and
(b) a cash payment in the aggregate amount of HK$106,156 million
will be paid by HSBC Asia Pacific to the Scheme Shareholders under the
Proposal.
E. Confirmation of financial resources
HSBC Asia Pacific intends to finance the entire amount of the Scheme
Consideration payable to the Scheme Shareholders under the Proposal from the
internal resources of the HSBC Group.
BofA Securities and Goldman Sachs, as joint financial advisers to HSBC
Holdings and HSBC Asia Pacific in connection with the Proposal, are satisfied
that sufficient financial resources are available to HSBC Asia Pacific to
satisfy the Scheme Consideration payable to the Scheme Shareholders under the
Proposal.
F. Conditions to the Proposal and the Scheme
The Proposal will be implemented, and the Scheme will become effective and
binding on Hang Seng Bank and all the Scheme Shareholders, subject to the
satisfaction or (if applicable) waiver of the following Conditions:
(a) the approval of the Scheme at the Hang Seng Bank Court Meeting
(by way of a poll) by holders of the Scheme Shares representing at least 75%
of the voting rights of such holders present and voting, in person or by
proxy, at the Hang Seng Bank Court Meeting, and the votes cast (by way of
poll) against the Scheme at the Hang Seng Bank Court Meeting not exceeding 10%
of the total voting rights attached to all Ordinance Disinterested Shares,
provided that:
(i) the Scheme is approved (by way of poll) by at least 75% of the votes
attaching to the Code Disinterested Shares held by the Code Disinterested
Shareholders of Hang Seng Bank that are cast either in person or by proxy at
the Hang Seng Bank Court Meeting; and
(ii) the number of votes cast (by way of poll) against the resolution to
approve the Scheme at the Hang Seng Bank Court Meeting is not more than 10% of
the votes attaching to all the Code Disinterested Shares held by the Code
Disinterested Shareholders of Hang Seng Bank;
(b) the passing of a special resolution by a majority of at least
75% of the votes cast by the Hang Seng Bank Shareholders present and voting in
person or by proxy at the Hang Seng Bank General Meeting (or otherwise in
accordance with the procedural requirements of section 564 of the Companies
Ordinance) to approve and give effect to the Scheme, including the approval of
the reduction of the issued share capital of Hang Seng Bank by cancelling and
extinguishing the Scheme Shares and the issue to HSBC Asia Pacific (or its
nominee) of such number of new Hang Seng Bank Shares as is equal to the number
of Scheme Shares cancelled;
(c) the sanction of the Scheme (with or without modification)
and the confirmation of the reduction of the issued share capital of Hang Seng
Bank involved in the Scheme by the High Court and the registration of a copy
of the order of the High Court by the Registrar of Companies under Part 2 of
the Companies Ordinance;
(d) the compliance with the procedural requirements of sections
230 and 231 and sections 673 and 674 of the Companies Ordinance in so far as
they relate to the effectiveness of the reduction of the issued share capital
of Hang Seng Bank and the Scheme, respectively;
(e) all Authorisations having been obtained or completed and
remaining in full force and effect without modification;
(f) all necessary Third Party Consents having been obtained or
waived by the relevant party(ies), where any failure to obtain such consent or
waiver would have a material adverse effect on the implementation of the
Proposal or the business of the Hang Seng Bank Group, in each case, taken as a
whole;
(g) no Authority having taken, instituted, implemented or
threatened any action, proceeding, suit, investigation, enquiry or reference
(and in each case, not having withdrawn the same), or having required any
action to be taken or otherwise having done anything, or having enacted, made
or proposed any statute, regulation, decision, order or change to published
practice (and in each case, not having withdrawn the same), or no member of
the Hang Seng Bank Group and/or its directors, officers or employees having
engaged in activities or conduct which might reasonably give rise to such
action, proceeding, suit, investigation, enquiry or reference, in each case
which would require, prevent or materially delay the implementation of the
Proposal or alter the terms and conditions envisaged for the Proposal, or make
the Proposal or its implementation in accordance with its terms void,
unenforceable, illegal or impracticable, or which would impose any material
and adverse conditions or obligations with respect to the Proposal or its
implementation in accordance with its terms and conditions, or impose any
limitation on the ability of any member of the Hang Seng Bank Group or any
member of the HSBC Group (excluding the Hang Seng Bank Group) to conduct their
businesses (or any part thereof) or to own, control or manage any of their
assets or properties (or any part thereof) to an extent which is material in
the context of the HSBC Group (excluding the Hang Seng Bank Group) taken as a
whole or in the context of the Hang Seng Bank Group taken as a whole or in the
context of the Proposal;
(h) since the publication of this announcement, there having been
no adverse change in the business, assets, financial or trading positions,
profits or prospects of any member of the Hang Seng Bank Group (to an extent
which is material in the context of the Hang Seng Bank Group taken as a whole
or in the context of the Proposal); and
(i) since the publication of this announcement, there not
having been instituted or remaining outstanding any litigation, arbitration
proceedings, prosecution or other legal proceedings to which any member of the
Hang Seng Bank Group is a party (whether as plaintiff, defendant or otherwise)
and no such proceedings having been threatened in writing, announced,
instituted or remaining outstanding by, against or in respect of any such
member (and no investigation by any Authority against or in respect of any
such member or the business carried on by any such member having been
threatened in writing, announced, instituted or remaining outstanding by,
against or in respect of any such member), in each case which is material and
adverse in the context of the Hang Seng Bank Group taken as a whole or in the
context of the Proposal.
Conditions (a) to (d) above are not waivable. HSBC Asia Pacific reserves the
right (but is not obliged) to waive, either in whole or in part and generally
or in respect of any particular matter, all or any of:
(i) Conditions (e) and (g), to the extent any waiver would not render
the Proposal (or the implementation of the Proposal in accordance with its
terms and conditions) illegal; and
(ii) Conditions (f), (h) and (i).
In respect of Condition (e), other than the Authorisations described in
Conditions (c) and (d) and the approval of the Hong Kong Stock Exchange for
the withdrawal of listing of Hang Seng Bank Shares from the Hong Kong Stock
Exchange upon the Scheme becoming effective, HSBC Asia Pacific is not
currently aware of any Authorisations which are required.
All of the Conditions will have to be satisfied or (if applicable) waived, on
or before the Conditions Long Stop Date, otherwise the Scheme will not become
effective and will lapse subject to the requirements of the Takeovers Code.
When all the Conditions are satisfied or (if applicable) waived, the Scheme
will become binding and effective on Hang Seng Bank and all the Scheme
Shareholders, irrespective of whether such Scheme Shareholder attended or
voted at the Hang Seng Bank Court Meeting and/or the Hang Seng Bank General
Meeting.
Pursuant to Note 2 to Rule 30.1 of the Takeovers Code, HSBC Asia Pacific may
only invoke any of the Conditions as a basis for not proceeding with the
Proposal if the circumstances which give rise to the right to invoke such
Condition are of material significance to HSBC Asia Pacific in the context of
the Proposal.
In light of the time required for the preparation of the Scheme Document and
the procedures of the High Court in respect of the Scheme, subject to the
satisfaction (or, if applicable, waiver) of the Conditions, the Proposal is
currently expected to be completed in the first half of 2026.
WARNING: Shareholders and/or potential investors of HSBC Holdings and Hang
Seng Bank should be aware that the Proposal will only be implemented if all
the Conditions are satisfied or (if applicable) waived on or before the
Conditions Long Stop Date. Shareholders and/or potential investors of HSBC
Holdings and Hang Seng Bank should therefore exercise caution when dealing in
the securities of HSBC Holdings and Hang Seng Bank respectively. Persons who
are in doubt as to the action they should take should consult their licensed
securities dealer, registered institution in securities, bank manager,
solicitor and/or other professional adviser.
G. Effect of the Scheme
Under the Proposal, subject to the Scheme becoming binding and effective in
accordance with its terms, each of the Scheme Shares will be cancelled and
extinguished in exchange for the Scheme Consideration (less the Dividend
Adjustment Amount, if any) per Scheme Share.
Upon such cancellation, the issued share capital of Hang Seng Bank will be
first reduced by the cancellation and extinguishment of the Scheme Shares in
issue on the Scheme Record Date, and will immediately be restored to the
amount immediately prior to such cancellation, extinguishment and reduction by
the issuance of new Hang Seng Bank Shares to HSBC Asia Pacific (or its
nominee) of such number of new Hang Seng Bank Shares as is equal to the number
of the Scheme Shares cancelled and extinguished on the Scheme Effective Date.
The reserve created in Hang Seng Bank's books of accounts as a result of the
cancellation, extinguishment and reduction in issued share capital of Hang
Seng Bank will be applied to the paying up in full of the new Hang Seng Bank
Shares so issued, credited as fully paid, to HSBC Asia Pacific (or its
nominee).
Subject to the Scheme becoming effective, the Scheme Consideration (less the
Dividend Adjustment Amount, if any) per Scheme Share will be paid to the
Scheme Shareholders whose names appear on the register of members of Hang Seng
Bank on the Scheme Record Date as soon as possible, but in any event no later
than seven business days (as defined in the Takeovers Code) after the Scheme
Effective Date.
H. Holders of Hang Seng Bank ADSs
Upon the Scheme becoming effective, the Scheme Shares underlying the Hang Seng
Bank ADSs will be cancelled and extinguished together with all other Scheme
Shares in consideration of the Scheme Consideration (less the Dividend
Adjustment Amount, if any) per Scheme Share. As the Hang Seng Bank ADSs are
governed by the Hang Seng Bank ADS Deposit Agreement and not governed by Hong
Kong law, the terms of the Proposal do not provide for the cancellation of the
Hang Seng Bank ADSs.
As at 7 October 2025, being the latest practicable date prior to the time of
the publication of this announcement for the purpose of ascertaining
information in this paragraph, there were 4,147,222 Hang Seng Bank ADSs
outstanding, with each Hang Seng Bank ADS representing one Hang Seng Bank
Share.
Further information for holders of the Hang Seng Bank ADSs in relation to the
Proposal will be set out in the Scheme Document.
VI. SHAREHOLDING STRUCTURE OF HANG SENG BANK
As at the time of the publication of this announcement, other than the issued
share capital of 1,875,737,536 Hang Seng Bank Shares (including the Hang Seng
Bank Shares underlying the Hang Seng Bank ADSs), there are no other relevant
securities issued by Hang Seng Bank.
In addition, as at the time of the publication of this announcement, a total
of 2,800,000 Hang Seng Bank Shares repurchased under the Hang Seng Bank Share
Buy-back Programme are pending cancellation by Hang Seng Bank. It is expected
that the 2,800,000 Hang Seng Bank Shares will be cancelled by Hang Seng Bank
on or before the publication of the Scheme Document, such that all of such
Hang Seng Bank Shares will not form part of the Scheme Shares to be cancelled
under the Scheme.
In compliance with the restrictions under the Takeovers Code on dealings in
Hang Seng Bank's securities, the purchases of Hang Seng Bank Shares by the
appointed independent broker under the Hang Seng Bank Share Buy-back Programme
have ceased with immediate effect from the publication of this announcement
and such cessation will continue during the offer period.
On the basis of and assuming that: (i) the 2,800,000 Hang Seng Bank Shares
repurchased under the Hang Seng Bank Share Buy-back Programme which are
pending cancellation as at the time of the publication of this announcement
are subsequently cancelled on or before the publication of the Scheme
Document; and (ii) there is no other change in the number of Hang Seng Bank
Shares and no other change in the holdings of Hang Seng Bank Shares from the
time of the publication of this announcement up to and including the Scheme
Effective Date, the table below sets out the shareholding structure of Hang
Seng Bank as at the time of the publication of this announcement and
immediately upon the completion of the Proposal:
Hang Seng Bank Shareholders As at the time of the publication of this announcement Immediately upon the completion of the Proposal
Number of Hang Seng Bank Shares Approximate % ((Notes 9 and 10)) Number of Hang Seng Bank Shares Approximate % ((Note 10))
HSBC Asia Pacific (with respect to the HSBC Asia Pacific Non-Scheme Shares) 1,188,057,371 63.3381 1,872,937,536 ((Note 8)) 100
((Notes 1 and 5))
(63.4328)
Internationale Kapitalanlagegesellschaft mbH ((Note 2)) 315,200 0.0168 - -
(0.0168)
Kathleen GAN Chieh Huey ((Note 3)) 2,500 0.0001 - -
(0.0001)
David Gordon ELDON ((Note 4)) 300 0.0000
(0.0000)
Aggregate number of Hang Seng Bank Shares held by HSBC Asia Pacific and HSBC 1,188,375,371 63.3551 1,872,937,536 100
Asia Pacific Concert Parties ((Notes 5 and 6))
(63.4498)
Code Disinterested Shareholders 684,562,165 36.4956 - -
(36.5502)
Total number of Scheme Shares ((Notes 7 and 8)) 684,880,165 36.5126 - -
(36.5672)
Number of Hang Seng Bank Shares repurchased by Hang Seng Bank pending 2,800,000 0.1493 - -
cancellation ((Note 8))
Total number of Hang Seng Bank Shares 1,875,737,536 100 1,872,937,536 100
Notes:
(1) Such Hang Seng Bank Shares represent the strategic
shareholding of HSBC Asia Pacific in Hang Seng Bank, and are held by HSBC Asia
Pacific through its wholly-owned subsidiary, Wayfoong Nominees Limited.
(2) Such Hang Seng Bank Shares reflect the holdings by
Internationale Kapitalanlagegesellschaft mbH (a wholly-owned subsidiary of
HSBC Holdings as at the date of this announcement) in its capacity as a fund
administrator as at 7 October 2025, being the latest practicable date prior to
the time of publication of this announcement for the purpose of ascertaining
its holdings in Hang Seng Bank Shares.
(3) As at the date of this announcement, Kathleen GAN
Chieh Huey is a director of HSBC Asia Holdings. Therefore, Ms. Gan is an HSBC
Asia Pacific Concert Party and is not a Code Disinterested Shareholder.
(4) As at the date of this announcement, David Gordon
ELDON is a director of HSBC Asia Pacific. Therefore, Mr. Eldon is an HSBC Asia
Pacific Concert Party and is not a Code Disinterested Shareholder.
(5) Holdings, borrowings or lendings of relevant
securities in Hang Seng Bank by HSBC Asia Pacific and the HSBC Asia Pacific
Concert Parties as set out in this announcement exclude the holdings,
borrowings or lendings by or in the capacities as discretionary fund managers,
asset managers and principal traders within the HSBC Group (including but not
limited to HSBC Asia Pacific) by reason of the application of Rule 21.6 of the
Takeovers Code. A further announcement will be made if the holdings,
borrowings or lendings by or in the capacities as discretionary fund managers,
asset managers and principal traders within the HSBC Group are significant.
Holdings, borrowings or lendings of relevant securities in Hang Seng Bank by
HSBC Asia Pacific and HSBC Asia Pacific Concert Parties in this announcement
exclude any holdings, borrowings or lendings on a non-discretionary basis for
and on behalf of its clients.
(6) BofA Securities and Goldman Sachs are joint financial
advisers to HSBC Holdings and HSBC Asia Pacific in connection with the
Proposal.
BofA Securities, and the members of the BofA Securities group are presumed to
be acting in concert with HSBC Asia Pacific in relation to Hang Seng Bank
under class (5) of the definition of "acting in concert" under the Takeovers
Code (except in respect of Hang Seng Bank Shares held by exempt principal
traders or exempt fund managers, in each case recognised by the Executive as
such for the purpose of the Takeovers Code).
Goldman Sachs, and the members of the Goldman Sachs group are presumed to be
acting in concert with HSBC Asia Pacific in relation to Hang Seng Bank under
class (5) of the definition of "acting in concert" under the Takeovers Code
(except in respect of Hang Seng Bank Shares held by exempt principal traders
or exempt fund managers, in each case recognised by the Executive as such for
the purpose of the Takeovers Code).
Details of holdings or borrowings or lendings of Hang Seng Bank Shares or
derivatives in respect of them by other parts of the BofA Securities group
and/or the Goldman Sachs group will be obtained as soon as possible after this
announcement has been made in accordance with Note 1 to Rule 3.5 of the
Takeovers Code. A further announcement will be made if the holdings,
borrowings or lendings of the other parts of the BofA Securities group and/or
the Goldman Sachs group are significant.
The statements in this announcement as to the holdings or borrowings or
lendings of Hang Seng Bank Shares or derivatives in respect of Hang Seng Bank
Shares by the HSBC Asia Pacific Concert Parties are subject to the holdings,
borrowings or lendings (if any) of the other parts of the BofA Securities
group and the Goldman Sachs group.
(7) The HSBC Asia Pacific Non-Scheme Shares will not form
part of the Scheme Shares. The other Hang Seng Bank Shares in issue as at the
Scheme Record Date (including but not limited to the HSBC Asia Pacific Scheme
Shares and all the Hang Seng Bank Shares held by the HSBC Asia Pacific Concert
Parties) will form part of the Scheme Shares.
Under the Scheme, part of the issued share capital of Hang Seng Bank will, on
the Scheme Effective Date, be reduced by cancelling and extinguishing the
Scheme Shares. Immediately after such cancellation, extinguishment and
reduction, the issued share capital of Hang Seng Bank will be restored to the
amount immediately prior to such cancellation, extinguishment and reduction by
the issue by Hang Seng Bank to HSBC Asia Pacific (or its nominee) of such
number of new Hang Seng Bank Shares as is equal to the number of the Scheme
Shares cancelled and extinguished on the Scheme Effective Date. The reserve
created in Hang Seng Bank's books of account as a result of the capital
reduction will be applied in paying up in full the new Hang Seng Bank Shares
so issued to HSBC Asia Pacific (or its nominee). The shareholding of HSBC Asia
Pacific immediately upon the completion of the Proposal represents the HSBC
Asia Pacific Non-Scheme Shares and the aforementioned new Hang Seng Bank
Shares issued to HSBC Asia Pacific (or its nominee) as is equal to the number
of the Scheme Shares cancelled and extinguished under the Scheme.
(8) As at the time of the publication of this
announcement, a total of 2,800,000 Hang Seng Bank Shares repurchased under the
Hang Seng Bank Share Buy-back Programme are pending cancellation by Hang Seng
Bank. It is expected that the 2,800,000 Hang Seng Bank Shares will be
cancelled by Hang Seng Bank on or before the publication of the Scheme
Document and will therefore not form part of the Scheme Shares to be cancelled
under the Scheme.
(9) The bracketed percentages in this column are
calculated on the basis that the 2,800,000 Hang Seng Bank Shares repurchased
have been cancelled.
(10) All percentages in the above table are subject to
rounding adjustments and may not add up to 100%.
VII. INFORMATION ON HSBC HOLDINGS, HSBC ASIA PACIFIC AND
HANG SENG BANK
A. Information on HSBC Holdings, HSBC Asia Pacific and HSBC
Group
HSBC Holdings, the parent company of the HSBC Group, is headquartered in
London. HSBC serves customers worldwide from offices in 57 countries and
territories. With assets of US$3,214 billion as of 30 June 2025, HSBC is one
of the world's largest banking and financial services organisations.
HSBC Asia Pacific is an authorized institution under the Banking Ordinance and
is principally engaged in banking and related financial business in Hong Kong.
HSBC Asia Pacific is a wholly-owned subsidiary of HSBC Holdings.
B. Information on Hang Seng Bank and Hang Seng Bank Group
The Hang Seng Bank Group is principally engaged in banking and related
financial business, and also conducts insurance, asset management and index
compiler businesses, in Hong Kong. As at the date of this announcement, Hang
Seng Bank is an indirect non-wholly owned subsidiary of HSBC Holdings.
Set out below is a summary of certain financial information of the Hang Seng
Bank Group (i) for the six months ended 30 June 2025 and 2024 as extracted
from the interim report of Hang Seng Bank for the six months ended 30 June
2025; and (ii) for the years ended 31 December 2024 and 2023 as extracted from
the annual report of Hang Seng Bank for the year ended 31 December 2024.
For the six months ended 30 June For the year ended 31 December
2025 2024 2024 2023
(unaudited) (unaudited) (audited) (audited)
(HK$ millions) (HK$ millions) (HK$ millions) (HK$ millions)
Net operating income before change in expected credit losses and other credit 20,975 20,431 41,537 40,822
impairment charges
Operating profit 8,549 11,396 21,558 19,946
Profit before tax 8,097 11,307 21,014 20,105
Profit for the period / year 6,876 9,888 18,369 17,838
As at 30 June As at 31 December
2025 2024 2024 2023
(unaudited) (unaudited) (audited) (audited)
(HK$ millions) (HK$ millions) (HK$ millions) (HK$ millions)
Total assets 1,821,680 1,708,453 1,795,196 1,692,094
Total liabilities 1,650,971 1,542,086 1,625,632 1,523,910
Net assets 170,709 166,367 169,564 168,184
VIII. HONG KONG LISTING RULES IMPLICATIONS FOR HSBC
HOLDINGS
The Proposal constitutes a notifiable transaction of HSBC Holdings pursuant to
Rule 14.06 of the Hong Kong Listing Rules. As one or more of the applicable
percentage ratios (as set out under Rule 14.07 of the Hong Kong Listing Rules)
exceeds 5% but are all less than 25%, the Proposal constitutes a discloseable
transaction for HSBC Holdings which is subject to the reporting and
announcement requirements, but is exempt from the shareholders' approval
requirement under Chapter 14 of the Hong Kong Listing Rules.
It is expected that the Scheme Shareholders as at the Scheme Record Date will
include certain connected persons of HSBC Holdings. Therefore, the payment of
the Scheme Consideration to the Scheme Shareholders who are connected persons
of HSBC Holdings will constitute a connected transaction of HSBC Holdings
under the Hong Kong Listing Rules. However, based on the information available
to HSBC Holdings, it is expected that the payment of the Scheme Consideration
to connected persons of HSBC Holdings who are the Scheme Shareholders will
constitute a fully exempt connected transaction of HSBC Holdings under Chapter
14A of the Hong Kong Listing Rules.
Having taken into account the objectives, the terms and conditions and the
reasons for, and the benefits of, the Proposal, the HSBC Holdings Directors
consider that: (a) the terms of the Proposal are fair and reasonable; and (b)
the Proposal is in the interests of the HSBC Holdings Shareholders as a whole.
IX. IMPLICATIONS UNDER THE UK LISTING RULES FOR HSBC HOLDINGS
HSBC Holdings is also listed on the London Stock Exchange and is subject to
the applicable requirements of the UK Listing Rules. The Proposal does not
constitute a "significant transaction" under the UK Listing Rules.
X. INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER OF HANG
SENG BANK
The Hang Seng Bank Board has formed the Hang Seng Bank IBC (comprising
Cordelia Chung, Clement Kwok King Man, Patricia Lam Sze Wan, Lin Huey Ru and
Wang Xiao Bin, all being independent non-executive directors of Hang Seng
Bank) in accordance with the requirements of the Takeovers Code. The Hang
Seng Bank IBC will make a recommendation (i) as to whether the Proposal is, or
is not, fair and reasonable and (ii) as to voting. Pursuant to Rule 2.8 of the
Takeovers Code, the Hang Seng Bank IBC should comprise all non-executive
directors (including independent non-executive directors) of Hang Seng Bank
who have no direct or indirect interest in the Proposal. Kathleen Gan Chieh
Huey, David Liao Yi Chien and Catherine Zhou Rong (being all the non-executive
directors of Hang Seng Bank) are considered to be interested in the Proposal
due to their positions in HSBC Group and are therefore not members of the Hang
Seng Bank IBC. Edward Cheng Wai Sun (being an independent non-executive
director of Hang Seng Bank and the Chairman of the Hang Seng Bank Board) is
also considered to be interested in the Proposal as a result of his being an
independent non-executive director of HSBC Asia Pacific and is therefore not a
member of the Hang Seng Bank IBC. Accordingly, the Hang Seng Bank IBC
comprises all of the independent non-executive directors of Hang Seng Bank
other than the Chairman of the Hang Seng Bank Board.
The Hang Seng Bank IFA will be appointed by the Hang Seng Bank Board (with the
approval of the Hang Seng Bank IBC) in due course to advise the Hang Seng Bank
IBC on the Proposal. A further announcement will be made after the appointment
of the Hang Seng Bank IFA.
The letter of advice from the Hang Seng Bank IFA and the recommendation of the
Hang Seng Bank IBC in respect of the Proposal and the Scheme will be included
in the Scheme Document to be despatched to the Hang Seng Bank Shareholders in
accordance with the Takeovers Code.
XI. WITHDRAWAL OF LISTING OF THE HANG SENG BANK SHARES FROM THE HONG KONG
STOCK EXCHANGE
Upon the Scheme becoming effective, all of the Scheme Shares will be cancelled
and the share certificates for the Scheme Shares will thereafter cease to have
effect as documents or evidence of title.
Hang Seng Bank will make an application to the Hong Kong Stock Exchange for
the withdrawal of the listing of the Hang Seng Bank Shares on the Hong Kong
Stock Exchange in accordance with Rule 6.15(2) of the Hong Kong Listing Rules,
subject to the Scheme becoming effective. The expected timetable will be
included in the Scheme Document.
XII. IF THE SCHEME IS NOT APPROVED OR THE PROPOSAL
LAPSES
Subject to the requirements under the Takeovers Code, the Proposal and the
Scheme will lapse if any of the Conditions are not satisfied or (if
applicable) waived on or before the Conditions Long Stop Date. The listing of
the Hang Seng Bank Shares on the Hong Kong Stock Exchange will not be
withdrawn if the Scheme is not approved or does not become effective, or the
Proposal otherwise lapses.
If the Scheme is withdrawn or not approved or the Proposal otherwise lapses,
there are restrictions under the Takeovers Code on making subsequent offers,
to the effect that neither HSBC Asia Pacific nor any person who acted in
concert with it in the course of the Proposal (nor any person who is
subsequently acting in concert with it) may, within 12 months from the date on
which the Scheme is withdrawn or not approved or the Proposal otherwise
lapses, announce an offer or possible offer for Hang Seng Bank, except with
the consent of the Executive.
Pursuant to Rule 2.3 of the Takeovers Code, if the Scheme is not approved and
the Proposal is not recommended by the Hang Seng Bank IBC or is not
recommended as fair and reasonable by the Hang Seng Bank IFA, all costs and
expenses incurred by Hang Seng Bank in connection with the Scheme will be
borne by HSBC Asia Pacific.
XIII. SCHEME SHARES, THE HANG SENG BANK COURT MEETING AND
THE HANG SENG BANK GENERAL MEETING
As at the time of the publication of this announcement:
(a) HSBC Asia Pacific (through Wayfoong Nominees Limited)
holds 1,188,057,371 Hang Seng Bank Shares (representing approximately 63.34%
of the total issued share capital of Hang Seng Bank) (i.e the HSBC Asia
Pacific Non-Scheme Shares), which will not form part of the Scheme Shares and
will therefore not be cancelled and extinguished upon the Scheme becoming
effective; and
(b) HSBC Asia Pacific Concert Parties hold an aggregate of
318,000 Hang Seng Bank Shares (representing approximately 0.02% of the total
issued share capital of Hang Seng Bank). For the avoidance of doubt, this
shareholding by HSBC Asia Pacific Concert Parties is disclosed on the basis of
and subject to the qualifications as disclosed in the section headed "VI.
Shareholding Structure of Hang Seng Bank" above.
The HSBC Asia Pacific Scheme Shares held by HSBC Asia Pacific and all the Hang
Seng Bank Shares held by HSBC Asia Pacific Concert Parties will form part of
the Scheme Shares and will be cancelled and extinguished upon the Scheme
becoming effective.
The Hang Seng Bank Shares held by HSBC Asia Pacific and the HSBC Asia Pacific
Concert Parties will not form part of the Code Disinterested Shares for the
purposes of vote counting at the Hang Seng Bank Court Meeting in order to
comply with the applicable requirements under Rule 2.10 of the Takeovers Code
for the Proposal. Accordingly, as at the time of the publication of this
announcement, there are 1,875,737,536 Hang Seng Bank Shares in issue, of which
684,880,165 will form the Scheme Shares.
All Hang Seng Bank Shareholders will be entitled to attend the Hang Seng Bank
General Meeting and vote on the special resolution(s) to give effect to the
reduction of the issued share capital of Hang Seng Bank by cancelling and
extinguishing the Scheme Shares and the issue to HSBC Asia Pacific (or its
nominee) of such number of new Hang Seng Bank Shares (credited as fully-paid
by applying the reserve created as a result of such cancellation,
extinguishment and reduction) as is equal to the number of the Scheme Shares
cancelled and extinguished on the Scheme Effective Date.
XIV. OTHER DISCLOSURE PURSUANT TO THE TAKEOVERS CODE
As at the time of the publication of this announcement:
(a) save as disclosed in the section headed "VI. Shareholding
Structure of Hang Seng Bank" above, neither HSBC Asia Pacific nor any HSBC
Asia Pacific Concert Party owns, controls or has direction over any Hang Seng
Bank Shares or convertible securities, warrants or options in respect of Hang
Seng Bank Shares;
(b) save as disclosed in the section headed "VI. Shareholding
Structure of Hang Seng Bank" above, none of HSBC Asia Pacific or any HSBC Asia
Pacific Concert Party has entered into any outstanding derivatives in respect
of securities of Hang Seng Bank;
(c) none of HSBC Asia Pacific or any HSBC Asia Pacific Concert
Party has received any irrevocable commitment to vote for or against the
Proposal;
(d) there are no arrangements (whether by way of option, indemnity
or otherwise) in relation to the Hang Seng Bank Shares or shares of HSBC Asia
Pacific and which might be material to the Proposal;
(e) there are no agreements or arrangements to which HSBC Asia
Pacific is a party which relate to the circumstances in which it may or may
not invoke, or seek to invoke, a Condition;
(f) save as disclosed in the section headed "VI. Shareholding
Structure of Hang Seng Bank" above, none of HSBC Asia Pacific or any HSBC Asia
Pacific Concert Party has borrowed or lent any relevant securities in Hang
Seng Bank (save for any borrowed Hang Seng Bank Shares which has been either
on-lent or sold);
(g) HSBC Asia Pacific is not aware of any understanding,
arrangement, agreement or special deal (as defined under Rule 25 of the
Takeovers Code) between (1) any Hang Seng Bank Shareholder on the one hand
(excluding, for these purposes, any HSBC Group entities that are Hang Seng
Bank Shareholders), and (2) HSBC Asia Pacific or any HSBC Asia Pacific Concert
Parties (excluding Hang Seng Bank, its subsidiaries and associated companies)
on the other hand; and
(h) Hang Seng Bank is not aware of any understanding, arrangement,
agreement or special deal (as defined under Rule 25 of the Takeovers Code)
between (1) any Hang Seng Bank Shareholder on the one hand (excluding, for
these purposes, any HSBC Group entities that are Hang Seng Bank Shareholders),
and (2) Hang Seng Bank, its subsidiaries or associated companies on the other
hand; and
(i) other than the Scheme Consideration payable under the
Scheme, HSBC Asia Pacific and the HSBC Asia Pacific Concert Parties have not
paid, and will not pay, any other consideration, compensation or benefit in
whatever form to the Scheme Shareholders in relation to the Scheme Shares.
Dealings by or in the capacities as discretionary fund managers, asset
managers and principal traders within the HSBC Group (including but not
limited to any buy-back under the Hang Seng Bank Share Buy-back Programme)
prior to and including the time of publication of this announcement to which
Rule 21.6 of the Takeovers Code apply shall not constitute dealings by HSBC
Asia Pacific Concert Parties for the purposes of certain rules in the
Takeovers Code as set out in Note 1 to Rule 21.6 of the Takeovers Code, but
such dealings will be disclosed in the Scheme Document in accordance with the
requirements under Rule 21.6 of the Takeovers Code. In addition, dealings by
HSBC Asia Pacific or HSBC Asia Pacific Concert Parties do not include dealings
on a non-discretionary basis for and on behalf of its clients.
XV. DESPATCH OF THE SCHEME DOCUMENT
A Scheme Document including, among other things, further details of the
Proposal, an explanatory statement, the expected timetable relating to the
Proposal, the recommendation of the Hang Seng Bank IBC, the letter of advice
from the Hang Seng Bank IFA and notices of the Hang Seng Bank Court Meeting
and the Hang Seng Bank General Meeting is required to be despatched to the
Hang Seng Bank Shareholders within 21 days after the date of this announcement
pursuant to Rule 8.2 of the Takeovers Code, unless the Executive's consent is
otherwise obtained.
In light of the time required for the preparation of the Scheme Document and
the procedures of the High Court in respect of the Scheme, HSBC Asia Pacific
and Hang Seng Bank will apply to the Executive pursuant to Rule 8.2 of the
Takeovers Code for its consent to extend the time limit for the despatch of
the Scheme Document. Further announcement(s) will be made in respect of the
despatch of the Scheme Document if and when appropriate in accordance with the
Takeovers Code, the Hong Kong Listing Rules and applicable laws and
regulations.
The Scheme Document will contain important information and the Scheme
Shareholders and the Hang Seng Bank Shareholders are urged to read the Scheme
Document carefully before casting any vote at (or providing any proxy in
respect of) the Hang Seng Bank Court Meeting or the Hang Seng Bank General
Meeting.
XVI. DISCLOSURE OF DEALINGS UNDER THE TAKEOVERS CODE
Respective associates (as defined under the Takeovers Code) of HSBC Asia
Pacific and Hang Seng Bank are reminded to disclose their dealings in the
relevant securities of Hang Seng Bank in accordance with Rule 22 of the
Takeovers Code.
In accordance with Rule 3.8 of the Takeovers Code, reproduced below is the
full text of Note 11 to Rule 22 of the Takeovers Code:
"Responsibilities of stockbrokers, banks and other intermediaries
Stockbrokers, banks and others who deal in relevant securities on behalf of
clients have a general duty to ensure, so far as they are able, that those
clients are aware of the disclosure obligations attaching to associates of an
offeror or the offeree company and other persons under Rule 22 and that those
clients are willing to comply with them. Principal traders and dealers who
deal directly with investors should, in appropriate cases, likewise draw
attention to the relevant Rules. However, this does not apply when the total
value of dealings (excluding stamp duty and commission) in any relevant
security undertaken for a client during any 7 day period is less than $1
million.
This dispensation does not alter the obligation of principals, associates and
other persons themselves to initiate disclosure of their own dealings,
whatever total value is involved.
Intermediaries are expected to co-operate with the Executive in its dealings
enquiries. Therefore, those who deal in relevant securities should appreciate
that stockbrokers and other intermediaries will supply the Executive with
relevant information as to those dealings, including identities of clients, as
part of that co-operation."
XVII. NOTICE TO HANG SENG BANK SHAREHOLDERS
A. Notice to Overseas Scheme Shareholders
The making and implementation of the Proposal to Scheme Shareholders who are
not resident in Hong Kong may be affected by the applicable laws of the
relevant jurisdictions. Any Scheme Shareholders who are not resident in Hong
Kong should inform themselves about and observe any applicable legal and
regulatory requirements in their own jurisdictions.
It is the responsibility of any overseas Scheme Shareholders wishing to take
any action in relation to the Proposal to satisfy themselves as to the full
observance of the laws and regulations of the relevant jurisdiction in
connection therewith, including the receipt of any governmental, exchange
control or other consents which may be required, the compliance with the
necessary formalities and the payment of any issue, transfer or other taxes
due from such shareholder in such jurisdiction. If you are in doubt as to your
position, you should consult your professional advisers.
In the event that the receipt of the Scheme Document by overseas Scheme
Shareholders is prohibited by any relevant law or regulation or may only be
effected after compliance with conditions or requirements that the directors
of HSBC Holdings, HSBC Asia Pacific and/or Hang Seng Bank regard as unduly
onerous or burdensome (or otherwise not in the best interests of HSBC
Holdings, HSBC Asia Pacific or Hang Seng Bank or their respective
shareholders), subject to the Executive's waiver and compliance with the
applicable requirements, the Scheme Document may not be despatched to such
overseas Scheme Shareholders. For that purpose, HSBC Holdings, HSBC Asia
Pacific and/or Hang Seng Bank will apply for a waiver pursuant to Note 3 to
Rule 8 of the Takeovers Code at such time. Any such waiver will only be
granted if the Executive is satisfied that it would be unduly burdensome to
despatch the Scheme Document to such overseas Scheme Shareholders. In granting
the waiver, the Executive will be concerned to see that all material
information in the Scheme Document is made available to such Scheme
Shareholders.
This announcement does not constitute an offer to sell or an invitation or
solicitation of an offer to acquire, purchase or subscribe for any securities
or a solicitation of any vote or approval in any jurisdiction. This
announcement does not constitute a prospectus or a prospectus equivalent
document.
B. Notice to US Hang Seng Bank Shareholders
The Proposal is being made to cancel the securities of a Hong Kong company by
means of a scheme of arrangement provided for under the Companies Ordinance
and is subject to Hong Kong disclosure requirements which are different from
those of the United States.
A transaction effected by means of a scheme of arrangement is not subject to
the tender offer rules of the US Securities Exchange Act of 1934, as amended.
Accordingly, the Proposal is subject to the disclosure requirements and
practices applicable in Hong Kong to schemes of arrangement which differ from
the disclosure and procedural requirements applicable under the US federal
securities laws.
The receipt of cash pursuant to the Proposal by a Scheme Shareholder who is
located in the US or may be potentially subject to US taxation (a "US Scheme
Shareholder") (or by a holder of Hang Seng Bank ADSs located in the United
States (a "US Hang Seng Bank ADS Holder")) as consideration for the
cancellation of his or her Scheme Shares pursuant to the Scheme may be a
taxable transaction for US federal income tax purposes and under applicable US
state and local, as well as foreign and other tax laws. Each US Scheme
Shareholder (or US Hang Seng Bank ADS Holder) is urged to consult his or her
independent professional adviser immediately regarding the tax consequences of
the Proposal applicable to him or her.
It may be difficult for US Scheme Shareholders (or US Hang Seng Bank ADS
Holders) to enforce their rights and claims arising out of the US federal
securities laws, since HSBC Holdings, HSBC Asia Pacific and Hang Seng Bank are
located in a country other than the United States, and some or all of their
officers and directors may be residents of a country other than the United
States. US Scheme Shareholders (or US Hang Seng Bank ADS Holders) may not be
able to sue a non-US company or its officers or directors in a non-US court
for violations of the US securities laws. Further, it may be difficult to
compel a non-US company and its affiliates to subject themselves to a US
court's judgement.
The financial information of Hang Seng Bank included in this announcement (if
any) has been prepared in accordance with Hong Kong Financial Reporting
Standards and/or International Financial Reporting Standards and thus may not
be comparable to the financial information of US companies or companies whose
financial statements are prepared in accordance with generally accepted
accounting principles of the United States.
XVIII. TAXATION AND INDEPENDENT ADVICE
Hang Seng Bank Shareholders are recommended to consult their own professional
advisers if they are in any doubt as to the taxation implications of the
Proposal. It is emphasised that none of HSBC Holdings, HSBC Asia Pacific, Hang
Seng Bank, BofA Securities, Goldman Sachs and Morgan Stanley nor any of their
respective directors, officers or associates or any other person involved in
the Proposal accepts responsibility (other than in respect of themselves, if
applicable) for any taxation effects on, or liabilities of, any persons as a
result of the Proposal (including the approval or rejection of the Proposal).
XIX. PRECAUTIONARY LANGUAGE REGARDING FORWARD-LOOKING
STATEMENTS
This announcement includes certain "forward-looking statements". These
statements are based on the current expectations of the management of HSBC
Holdings, HSBC Asia Pacific and/or Hang Seng Bank (as the case may be) and are
naturally subject to uncertainty and changes in circumstances. The
forward-looking statements contained in this announcement include statements
about the expected effects on the HSBC Group and/or Hang Seng Bank Group of
the Proposal, the expected timing and scope of the Proposal, and all other
statements in this announcement other than historical facts.
Forward-looking statements include, without limitation, statements typically
containing words such as "intends", "expects", "targets", "estimates",
"envisages" and words of similar import. By their nature, forward-looking
statements involve risk and uncertainty because they relate to events and
depend on circumstances that will occur in the future. There are a number of
factors that could cause actual results and developments to differ materially
from those expressed or implied by such forward-looking statements. These
factors include, but are not limited to, the satisfaction of the conditions to
the Proposal, as well as additional factors, such as general, social, economic
and political conditions in the countries in which the HSBC Group and/or the
Hang Seng Bank Group operate or other countries which have an impact on the
HSBC Group and/or the Hang Seng Bank Group's business activities or
investments, interest rates, the monetary and interest rate policies of the
countries in which the HSBC Group and/or the Hang Seng Bank Group operate,
inflation or deflation, foreign exchange rates, the performance of the
financial markets in the countries in which the HSBC Group and/or the Hang
Seng Bank Group operate and globally, changes in domestic and foreign laws,
regulations and taxes, changes in competition and the pricing environments in
the countries in which the HSBC Group and/or the Hang Seng Bank Group operate
and regional or general changes in asset valuations. Other unknown or
unpredictable factors could cause actual results to differ materially from
those in the forward-looking statements.
All written and oral forward-looking statements attributable to HSBC Holdings,
HSBC Asia Pacific, Hang Seng Bank and/or persons acting on behalf of any of
them are expressly qualified in their entirety by the cautionary statements
above. The forward-looking statements included herein are made only as of the
date of this announcement.
Hang Seng Bank Shareholders will be informed of any material changes to the
information contained in this announcement or any new material information of
Hang Seng Bank as soon as possible in accordance with Rule 9.1 of the
Takeovers Code.
XX. INSIDE INFORMATION
This announcement contains inside information for HSBC Holdings and Hang Seng
Bank pursuant to the Inside Information Provisions (as defined in the Hong
Kong Listing Rules) under Part XIVA of the Securities and Futures Ordinance
(Chapter 571 of the Laws of Hong Kong). This announcement also contains inside
information for HSBC Holdings for the purposes of Article 7 of the Market
Abuse Regulation (EU) No 596/2014 (as it forms part of domestic law of the
United Kingdom by virtue of the European Union (Withdrawal) Act 2018, as
amended).
XXI. DEFINITIONS
In this announcement, the following expressions have the meaning set out below
unless the context otherwise requires:
"2025 Third Interim Dividend" the third interim dividend of Hang Seng Bank for the financial year ending 31
December 2025, which is expected to be declared by the Hang Seng Bank Board on
10 October 2025 and to be paid by Hang Seng Bank thereafter
"acting in concert" has the meaning ascribed to it in the Takeovers Code
"Authorisations" authorisations, approvals, rulings, permissions, clearance, waivers and
consents and all registrations and filings (including without limitation any
which are required or desirable under or in connection with any applicable
laws or regulations or any licences or permits of any member of the Hang Seng
Bank Group) for the Proposal or its implementation and the withdrawal of
listing of the Hang Seng Bank Shares from the Hong Kong Stock Exchange in
accordance with its terms and conditions
"Authority" any supranational, national, federal, state, regional, provincial, municipal,
local or other government, governmental, quasi-governmental, legal, regulatory
or administrative authority, department, branch, agency, commission, bureau or
body (including any securities or stock exchange) or any court, tribunal, or
judicial or arbitral body
"Banking Ordinance" the Banking Ordinance (Chapter 155 of the Laws of Hong Kong)
"BofA Securities" Merrill Lynch (Asia Pacific) Limited, a corporation licensed to carry on type
1 (dealing in securities), type 4 (advising on securities), type 5 (advising
on futures contracts) and type 6 (advising on corporate finance) regulated
activities under the SFO, being one of the joint financial advisers to HSBC
Holdings and HSBC Asia Pacific in respect of the Proposal
"bps" basis points
"CET1" Common Equity Tier 1
"Code Disinterested Share(s)" the Scheme Share(s), other than any Scheme Share(s) which are beneficially
held by HSBC Asia Pacific or the HSBC Asia Pacific Concert Parties. For the
avoidance of doubt, the Code Disinterested Shares shall include any Scheme
Share(s) held by any member of the HSBC Group or the Hang Seng Bank Group on a
non-discretionary and non-proprietary basis for and on behalf of clients who
are not HSBC Asia Pacific or the HSBC Asia Pacific Concert Parties
"Code Disinterested Shareholder(s)" holder(s) of the Code Disinterested Share(s)
"Companies Ordinance" the Companies Ordinance (Chapter 622 of the Laws of Hong Kong)
"Condition(s)" the conditions to the implementation of the Proposal and effectiveness of the
Scheme, as set out in the section headed "F. Conditions to the Proposal and
the Scheme" in this announcement
"Conditions Long Stop Date" 30 September 2026, or such later date as HSBC Asia Pacific and Hang Seng Bank
may agree and, to the extent applicable, as the Executive may consent to
and/or the High Court may direct
"connected person(s)" has the meaning ascribed to it in the Hong Kong Listing Rules
"Dividend Adjustment Amount" means an amount by which the Scheme Consideration will be reduced in the event
that:
(a) after the date of this announcement, any dividend, distribution and/or
return of capital (excluding the 2025 Third Interim Dividend) is announced,
declared, made and/or paid in respect of the Hang Seng Bank Shares; and
(b) the record date for determining the entitlements to any such dividend,
distribution and/or return of capital (as the case may be) falls on a day
which is after the date of this announcement and before the Scheme Effective
Date,
with such amount being equal to the aggregate amount of all such dividends,
distributions and/or returns of capital on a per Hang Seng Bank Share basis
"Executive" the Executive Director of the Corporate Finance Division of the SFC or any
delegate for the time being of the Executive Director
"exempt fund manager" has the meaning ascribed to it in the Takeovers Code
"exempt principal trader" has the meaning ascribed to it in the Takeovers Code
"Goldman Sachs" Goldman Sachs (Asia) L.L.C., a company incorporated in Delaware with limited
liability and licensed under the SFO to carry out type 1 (dealing in
securities), type 4 (advising on securities), type 5 (advising on futures
contracts), type 6 (advising on corporate finance) and type 9 (asset
management) regulated activities under the SFO, being one of the joint
financial advisers to HSBC Holdings and HSBC Asia Pacific in respect of the
Proposal
"Hang Seng Bank" Hang Seng Bank Limited, a company incorporated in Hong Kong with limited
liability, whose Hang Seng Bank Shares are listed on the Main Board of the
Hong Kong Stock Exchange (stock codes: 11 (HKD Counter) and 80011 (RMB
Counter))
"Hang Seng Bank ADS(s)" American depositary shares of Hang Seng Bank which are currently serviced by
BNY Mellon Shareowner Services as the depositary, each representing one Hang
Seng Bank Share
"Hang Seng Bank ADS Deposit Agreement" the deposit agreement dated 19 October 1994 by and among Hang Seng Bank, The
Bank of New York and all holders and owners of American depositary receipts
evidencing the Hang Seng Bank ADSs (as amended and supplemented from time to
time)
"Hang Seng Bank Board" the board of directors of Hang Seng Bank
"Hang Seng Bank Court Meeting" a meeting of the Scheme Shareholders to be convened at the direction of the
High Court for the purpose of considering, and if thought fit, approving the
Scheme
"Hang Seng Bank General Meeting" a general meeting of Hang Seng Bank to be convened and held on the same date
as the Hang Seng Bank Court Meeting for the purposes of considering, and if
thought fit, approving the Scheme and the implementation of the Scheme,
including the reduction and restoration of the issued share capital of Hang
Seng Bank under the Proposal
"Hang Seng Bank Group" Hang Seng Bank and its subsidiaries from time to time
"Hang Seng Bank IBC" the independent board committee of Hang Seng Bank established by the Hang Seng
Bank Board to make a recommendation to the Code Disinterested Shareholders in
respect of the Proposal and the Scheme, as required by the Takeovers Code,
comprising Cordelia Chung, Clement Kwok King Man, Patricia Lam Sze Wan, Lin
Huey Ru and Wang Xiao Bin
"Hang Seng Bank IFA" the independent financial adviser to be appointed by the Hang Seng Bank Board
with the approval of the Hang Seng Bank IBC to advise the Hang Seng Bank IBC
in connection with the Proposal and the Scheme, as required by the Takeovers
Code
"Hang Seng Bank Share Buy-back Programme" the share buy-back programme of Hang Seng Bank announced on 31 July 2025
"Hang Seng Bank Share(s)" ordinary share(s) in the share capital of Hang Seng Bank
"Hang Seng Bank Shareholder(s)" holder(s) of Hang Seng Bank Share(s)
"High Court" the High Court of Hong Kong
"HK$" Hong Kong dollars, the lawful currency of Hong Kong
"Hong Kong" Hong Kong Special Administrative Region of the People's Republic of China
"Hong Kong Comparable Peers" all commercial banks that are headquartered in Hong Kong and have a primary
listing on the Hong Kong Stock Exchange, being The Bank of East Asia Limited,
BOC Hong Kong (Holdings) Limited and Dah Sing Banking Group Limited
"Hong Kong Listing Rules" The Rules Governing the Listing of Securities on The Stock Exchange of Hong
Kong Limited (as revised, supplemented or otherwise modified from time to
time)
"Hong Kong Stock Exchange" The Stock Exchange of Hong Kong Limited
"HSBC Holdings" HSBC Holdings plc, a company incorporated in England and Wales with limited
liability, whose ordinary shares are listed on the Hong Kong Stock Exchange
(stock code: 5), the London Stock Exchange and the Bermuda Stock Exchange and
whose American depositary receipts are listed on the New York Stock Exchange
"HSBC Asia Holdings" HSBC Asia Holdings Limited, a company incorporated in Hong Kong with limited
liability and a wholly owned subsidiary of HSBC Holdings
"HSBC Asia Pacific" The Hongkong and Shanghai Banking Corporation Limited, a company incorporated
in Hong Kong with limited liability and a wholly owned subsidiary of HSBC
Holdings
"HSBC Asia Pacific Concert Party(ies)" parties acting in concert with HSBC Asia Pacific
"HSBC Asia Pacific Non-Scheme Shares" 1,188,057,371 Hang Seng Bank Shares held by HSBC Asia Pacific as a strategic
shareholding, which will not form part of the Scheme Shares
"HSBC Asia Pacific Scheme Shares" any and all Hang Seng Bank Shares held by HSBC Asia Pacific, other than the
HSBC Asia Pacific Non-Scheme Shares
"HSBC Group" or "HSBC" HSBC Holdings and its subsidiaries from time to time
"HSBC Holdings Directors" the directors of HSBC Holdings
"HSBC Holdings Shareholder(s)" holder(s) of shares in the share capital of HSBC Holdings
"Last Trading Day" 8 October 2025, being the last trading day on the Hong Kong Stock Exchange
immediately prior to the date of this announcement
"Morgan Stanley" Morgan Stanley Asia Limited, a company incorporated in Hong Kong with limited
liability and licensed under the SFO to carry on type 1 (dealing in
securities), type 4 (advising on securities), type 5 (advising on futures
contracts), type 6 (advising on corporate finance) and type 9 (asset
management) regulated activities under the SFO, the financial adviser to Hang
Seng Bank in respect of the Proposal
"Ordinance Disinterested Share(s)" has the meaning ascribed to "disinterested shares" in section 674(3) of the
Companies Ordinance
"Proposal" the proposal for the privatisation of Hang Seng Bank by HSBC Asia Pacific by
way of the Scheme and the withdrawal of listing of the Hang Seng Bank Shares
from the Hong Kong Stock Exchange, on the terms and subject to the conditions
as described in this announcement
"relevant securities" has the meaning ascribed to it in Note 4 to Rule 22 of the Takeovers Code
"Scheme" a scheme of arrangement to be proposed under Section 673 of the Companies
Ordinance for the implementation of the Proposal, involving the cancellation
and extinguishment of all the Scheme Shares and the restoration of the share
capital of Hang Seng Bank to the amount immediately before the cancellation,
extinguishment and reduction of the Scheme Shares by the issue by Hang Seng
Bank to HSBC Asia Pacific (or its nominee) of such number of new Hang Seng
Bank Shares (credited as fully-paid by applying the reserve created as a
result of such cancellation, extinguishment and reduction) as is equal to the
number of the Scheme Shares cancelled and extinguished on the Scheme Effective
Date
"Scheme Consideration" the consideration in Hong Kong dollars for the cancellation and extinguishment
of the Scheme Shares under the Scheme, which is expressed as consideration per
Scheme Share
"Scheme Document" the composite scheme document to be despatched by HSBC Holdings, HSBC Asia
Pacific and Hang Seng Bank containing further details of the Scheme
"Scheme Effective Date" the date on which the Scheme becomes effective in accordance with the
Companies Ordinance
"Scheme Record Date" the record date to be announced for determining entitlements of the Scheme
Shareholders under the Scheme
"Scheme Share(s)" all of the Hang Seng Bank Shares in issue and any further Hang Seng Bank
Shares as may be issued prior to the Scheme Record Date, other than the HSBC
Asia Pacific Non-Scheme Shares
"Scheme Shareholder(s)" the registered holder(s) of the Scheme Shares
"SFC" the Securities and Futures Commission of Hong Kong
"SFO" the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
"Takeovers Code" the Hong Kong Code on Takeovers and Mergers (as revised, supplemented or
otherwise modified from time to time)
"Third Party Consents" third party consents in relation to the Proposal which may be required under
existing contractual obligations to which any member of the Hang Seng Bank
Group is a party
"UK Listing Rules" the Listing Rules issued by the Financial Conduct Authority of the United
Kingdom (as revised, supplemented or otherwise modified from time to time)
"US" or "United States" the United States of America
"US$" United States dollars, the lawful currency of the United States
"US Hang Seng Bank ADS Holder" has the meaning ascribed to it in the section headed "XVII. Notice to Hang
Seng Bank Shareholders" in this announcement
"US Scheme Shareholder" has the meaning ascribed to it in the section headed "XVII. Notice to Hang
Seng Bank Shareholders" in this announcement
"%" per cent.
For and on behalf of For and on behalf of
HSBC Holdings plc Hang Seng Bank Limited
Brendan Nelson Edward Cheng Wai Sun
Group Chairman Chairman
For and on behalf of
The Hongkong and Shanghai Banking Corporation Limited
Dr. Peter Wong Tung Shun
Non-executive Chairman
The Board of Directors of HSBC Holdings plc as at the date of this
announcement comprises: Brendan Robert Nelson*, Georges Bahjat Elhedery,
Geraldine Joyce Buckingham(†), Rachel Duan(†), Dame Carolyn Julie
Fairbairn(†), James Anthony Forese(†), Ann Frances Godbehere(†), Steven
Craig Guggenheimer(†), Manveen (Pam) Kaur, Dr José Antonio Meade
Kuribreña(†), Kalpana Jaisingh Morparia(†), Eileen K Murray(†), and
Swee Lian Teo(†).
* Independent non-executive Chair
(†) Independent non-executive Director.
The board of directors of HSBC Asia Pacific as at the date of this
announcement comprises: Dr. Peter Wong Tung Shun, David Gordon Eldon, David
Liao Yi Chien, Surendranath Ravi Rosha, Paul Jeremy Brough, Judy Chau Lai Kun,
Edward Cheng Wai Sun, Sonia Cheng Chi Man, Choi Yiu Kwan, Andrea Lisa Della
Mattea, Manveen (Pam) Kaur, Rajnish Kumar, Beau Kuok Khoon Chen, Lam Tin Fuk
and Annabelle Long Yu.
The Hang Seng Bank Board as at the date of this announcement comprises: Edward
Cheng Wai Sun* (Chairman), Diana Cesar (Chief Executive), Cordelia Chung*,
Kathleen Gan Chieh Huey#, Clement Kwok King Man*, Patricia Lam Sze Wan*, David
Liao Yi Chien#, Lin Huey Ru*, Saw Say Pin (Chief Financial Officer), Wang Xiao
Bin* and Catherine Zhou Rong#.
# Non-executive Directors
* Independent Non-executive Directors
Hong Kong, 9 October 2025
HSBC Holdings plc Hang Seng Bank Limited
Registered Office and Group Head Office: 恒生銀行有限公司
8 Canada Square, London E14 5HQ, United Kingdom Registered Office and Head Office: 83 Des Voeux Road Central, Hong Kong
Web: www.hsbc.com Incorporated in Hong Kong with limited liability
Incorporated in England and Wales with limited liability. Registration number
617987
The Hongkong and Shanghai Banking Corporation Limited
香港上海滙豐銀行有限公司
Registered Office and Group Head Office:
1 Queen's Road Central, Hong Kong
Incorporated in Hong Kong with limited liability
1 Research analyst target prices from Bloomberg as of 8 October 2025 and
based on DBS Bank (24 September 2025), Citi (31 July 2025), China
International Capital Corporation (31 July 2025), J.P. Morgan (30 July 2025)
and Morningstar (30 July 2025). The research analyst target prices based on
BofA Securities (12 September 2025), Goldman Sachs (30 July 2025) (each being
a joint financial adviser to HSBC Holdings and HSBC Asia Pacific) and Morgan
Stanley (13 August 2025) (being the financial adviser to Hang Seng Bank) were
excluded.
2 The Hongkong and Shanghai Banking Corporation Limited is a registered
institution under the SFO, registered to carry on type 1 (dealing in
securities), type 2 (dealing in futures contracts), type 4 (advising on
securities), type 5 (advising on futures contracts), type 6 (advising on
corporate finance) and type 9 (asset management) regulated activities under
the SFO and a licensed bank under the Banking Ordinance.
3 On the basis that the 2,800,000 Hang Seng Bank Shares which have been
repurchased as at the date of this announcement and are pending cancellation
have been cancelled.
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