HSBC’s plan to sell stake in its Indian life insurance joint venture (JV) with two public-sector banks, Canara Bank and Oriental Bank of Commerce (OBC), could hit a rough patch as the two banks are planning to oppose the proposed deal. Public sector banks apparently are irked with HSBC’s decision of selling the stake without their consultation.
The discontentment of two banks is quite justified given that the clause, which gives shareholders the right to be part of a sale transaction if one decides to sell stake, was inserted in the shareholding agreement when the JV was formed. Further, if the tag-along right is exercised by the two state-owned banks, it could spoil HSBC’s plan of a smooth exit at premium valuations.
Meanwhile, the life insurance firm is reported valued at $800 million (Rs 4,000 crore), the HSBC stake could be worth about $200 million (approximately Rs 1,000 crore). Further, as per reports, Canada’s Manulife Financial Corp is in race for HSBC’s stake in the JV.
Company Name | CMP |
---|---|
SBI | 812.50 |
Bank Of Baroda | 240.30 |
Canara Bank | 99.65 |
PNB | 100.70 |
Union Bank Of India | 116.60 |
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