OCBC courts Great Eastern with S$1.4b offer

The bank plans to increase its investment beyond its current 88.44% stake.

Oversea-Chinese Banking Corporation Limited (OCBC) announced a S$1.4b voluntary unconditional general offer for the 11.56% stake in Great Eastern Holdings that it does not currently own. 

This move aims to bolster OCBC's business pillars of banking, wealth management, and insurance, whilst optimising its capital to enhance shareholder returns. 

The bank said in a media release the offer aligns with OCBC's corporate strategy to solidify its wealth management leadership position and capitalise on opportunities in the rapidly growing Asian market.

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The offer price of S$25.60 represents a 36.9% premium over Great Eastern's last traded price of S$18.70 and premiums of 38.6%, 40.0%, and 42.4% over the one-month, three-month, and 12-month periods up to and including the last trading date of 9 May.

With this offer, OCBC intends to increase its investment in Great Eastern beyond its current 88.44% stake, with plans to delist the insurer from the SGX-ST.

“The Offer is a natural progression of OCBC’s strategy. We have moved intentionally to build up a strong wealth management franchise by hiring the best people and instituting best practices and processes, and raising our investment in Great Eastern. We have been looking at opportunities to best use our capital and believe the Offer allows us to deploy our resources into a key business that is expected to be earnings accretive to OCBC.” Helen Wong, OCBC Group CEO said in the statement.