Big Buy

London, March 28: The Singapore government on Monday snapped up a ?2.3-billion stake in Standard Chartered, the British bank with one of the biggest presence in East Asia, indicating that it would not launch a bid for the whole group, at least in the short term.

However, Temasek Holdings, Singapore’s state-owned investment company, would not comment on whether it might try to launch a bid for the whole of Standard Chartered in the longer term. It didn’t rule out asking for board representation, saying that it was something to discuss with the board and management of Standard Chartered, when it would be “appropriate and useful” to the company.

It is understood that Temasek informed the Standard Chartered board of the deal to buy an 11.55 per cent stake in the bank only shortly before the announcement. The purchase is thought to have been received positively by Standard Chartered, which regards the Singaporean group as a friendly long-term investor.

In a statement, Temasek said it regarded itself as a “stable shareholder, committed to supporting Standard Chartered’s continued growth as a unique franchise”. It also said the current Standard Chartered management team was instrumental in its success and admired their “strong capability and keen sense of business”.

The British bank’s stake was acquired from the estate of Tan Sri Khoo Teck Puat, the late Malaysian-born billionaire, who died two years ago. Temasek will buy 152.4 million shares in the bank, which focuses on emerging markets, ending two years of speculation that the shareholding would be snapped up by Citigroup or JP Morgan Chase as a platform to launch a bid for Standard Chartered.

It was unclear till Monday night what price the deal had been agreed at, but based on Standard Chartered’s closing price on the London Stock Exchange, the stake would be worth about ?2.3 billion. The announcement of the deal came after the close of trading, when shares in Standard Chartered fell 0.5 per cent, valuing the company at about ?20 billion. The share purchase has still to be approved by the Financial Services Authority.

Tan Sri Khoo Teck Puat helped to rescue Standard Chartered from a hostile takeover bid by Lloyds Bank in the 1980s. He held on to the stake until his death in 2004, when his family, including his daughters Jacqueline and Elizabeth, inherited it. They have long been rumoured to be willing sellers.

Elizabeth Khoo, a trustee of the Estate, said on Monday in a statement: “We are confident that Temasek will be able to effectively support Standard Chartered’s continued growth. My late father would be happy as he had wanted the block to be sold to a proven long-term investor and had a high regard for Temasek.”

Temasek has been an active player on the UK corporate scene in the past few months. Late last year Singapore was planning a bid for P&, initially through its Temasek investment arm, before proceeding with an offer through the Port of Singapore Authority. Its bid hopes were dashed by a higher offer from Dubai Ports World.