The planned privatization of Hang Seng Bank $11 by HSBC Holdings $HSBA (+0%) has cleared a decisive hurdle today.
The High Court of Hong Kong approved the underlying takeover plan (scheme of arrangement) without any changes, paving the way for the delisting of the bank from the Hong Kong stock exchange.
The court also confirmed the capital reduction associated with the privatization plan at the same hearing, according to a joint announcement by HSBC Holdings, The Hongkong and Shanghai Banking Corporation Limited (HSBC Asia Pacific) and Hang Seng Bank.
The plan is expected to become final and effective on Monday, January 26, following the registration of the court order with the Hong Kong Companies Registry.
Hang Seng Bank has received approval from the Hong Kong Stock Exchange to delist its shares with effect from 4:00 p.m. on Tuesday, January 27, subject to the Plan becoming final and effective.
The privatization plan had already received shareholder approval at relevant meetings earlier this month, as referenced in a joint announcement on January 8.
The companies announced that most of the conditions for the privatization had been met. The remaining conditions relating to the registration of the court order and other administrative matters are also expected to be met.
HSBC Holdings, through its subsidiary HSBC Asia Pacific, already holds a majority stake in Hang Seng Bank, one of the most established financial institutions in Hong Kong.
The joint announcement noted that shareholders and potential investors should exercise caution when trading in securities of HSBC Holdings and Hang Seng Bank as the operation will only be implemented if all conditions are satisfied or waived by the specified deadline.