HSBC Holdings Plc’s $9.4 billion sale of its stake in Ping An Insurance (Group) Co. to Thai billionaire Dhanin Chearavanont was initiated by the insurer’s chairman, the official who was approached to buy the stake said.
The disclosure is the first confirmation of the Chinese insurer’s role in brokering the transaction and highlights Ping An Chairman Peter Ma’s determination to find his ownpartner as HSBC looked to exit a decade-long investment.
The logo of Ping An Insurance (Group) Co. is displayed during a news conference in Hong Kong, China. Photographer: Jerome Favre/Bloomberg
Ma approached Tse Ping, vice chairman of Charoen Pokphand Group Co., about buying the stake, the Thai company executive said. Both are members of an advisory body to China’s legislature. Dhanin’s CP Group completed the deal, the largest sale of a Chinese company to a foreign buyer, on Feb. 6.
“Mr. Ma wanted a long-term investor so that Ping An’s share price doesn’t fluctuate too much,” Tse said in an interview in Hong Kong yesterday. “Ping An is a good company -- we like its culture and business model. That’s why we are willing to pay a good pricefor it.”
Ma’s role illustrates the influence exerted by Chinese executives over their investors and the importance of personal connections in closing a transaction that allowed London-based HSBC to reap a $2.6 billion profit. The deal survived a last- minute withdrawal of funding by China Development Bank Corp. and scrutiny by regulators in Beijing.
HSBC’s Search
HSBC spent months searching for potential buyers until Ma approached CP Group, whose main business is agriculture, Tse said, declining to elaborate on the discussions with Ma. Among those approached was Singapore’s Temasek Holdings Pte, Tse said.
Tan Yong Meng, a spokesman for Temasek, declined to comment, as did officials at Ping An and HSBC.
The deal has already yielded a $1.3 billion paper profit for Dhanin, who is Thailand’s second richest man with an estimated net worth of $6.6 billion, according to the Bloomberg Billionaires Index. About 55 percent of his fortune is from overseas private companies.
Questions about funding fueled concerns about the deal’s survival at times. Ping An shares fell the most in more than five months on Jan. 8, when Chinese magazine Caixin reported CDB had pulled financing after learning of the involvement of Xiao Jianhua, a Chinese financier, in the deal.
In an earlier report, Caixin said Xiao channeled funds from three municipal commercial banks that he reportedly controls to help CP Group purchase the Ping An shares. Xiao denied any involvement in the transaction in a Dec. 23 statement via his lawyer, Caixin reported.
The disclosure is the first confirmation of the Chinese insurer’s role in brokering the transaction and highlights Ping An Chairman Peter Ma’s determination to find his ownpartner as HSBC looked to exit a decade-long investment.
The logo of Ping An Insurance (Group) Co. is displayed during a news conference in Hong Kong, China. Photographer: Jerome Favre/Bloomberg
Ma approached Tse Ping, vice chairman of Charoen Pokphand Group Co., about buying the stake, the Thai company executive said. Both are members of an advisory body to China’s legislature. Dhanin’s CP Group completed the deal, the largest sale of a Chinese company to a foreign buyer, on Feb. 6.
“Mr. Ma wanted a long-term investor so that Ping An’s share price doesn’t fluctuate too much,” Tse said in an interview in Hong Kong yesterday. “Ping An is a good company -- we like its culture and business model. That’s why we are willing to pay a good pricefor it.”
HSBC’s Search
HSBC spent months searching for potential buyers until Ma approached CP Group, whose main business is agriculture, Tse said, declining to elaborate on the discussions with Ma. Among those approached was Singapore’s Temasek Holdings Pte, Tse said.
Tan Yong Meng, a spokesman for Temasek, declined to comment, as did officials at Ping An and HSBC.
The deal has already yielded a $1.3 billion paper profit for Dhanin, who is Thailand’s second richest man with an estimated net worth of $6.6 billion, according to the Bloomberg Billionaires Index. About 55 percent of his fortune is from overseas private companies.
Questions about funding fueled concerns about the deal’s survival at times. Ping An shares fell the most in more than five months on Jan. 8, when Chinese magazine Caixin reported CDB had pulled financing after learning of the involvement of Xiao Jianhua, a Chinese financier, in the deal.
In an earlier report, Caixin said Xiao channeled funds from three municipal commercial banks that he reportedly controls to help CP Group purchase the Ping An shares. Xiao denied any involvement in the transaction in a Dec. 23 statement via his lawyer, Caixin reported.
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