Not long after returning from their Christmas and New Year breaks, the Standard Chartered (StCh) CEO, Bill Winters, and his Exco team received the spine-chilling news that First Abu Dhabi Bank (FAD), has been stalking Standard Chartered (StCh), eyeing a possible takeover bid. Although FAD is a smaller bank than StCh, its owners have deep pockets and a possible $25bn/$30bn price tag for StCh should not present much of a problem.
All this came about following revelations from Bloomberg that FAD was snooping around, prompting FAD to release a statement confirming that, yes, they had been looking at StCh, but have now shelved the idea. Notwithstanding the fact that FAD shelved the idea without acting on it, under current UK takeover rules, FAD is not allowed to make any tender offer for StCh for at least another 6 months following its expression of non-interest. The only way to get around this is if they are able to table a Board approved bid…. or if another rival bidder enters the scene.
Now, Winters knows that the FAD statement, although seemingly innocuous, would have been loud enough to stir all potential predators out there out of their slumber. He also knows that those predators would immediately have briefed their corporate finance teams who are, as we speak, pouring over the StCh numbers and punching them into their valuation models.
While making a bid for StCh may not have been an agenda item for 2023 for any of them, none of them would want to be caught napping should FAD manage to smooch up to the Board and deliver a Board recommended bid, or if a rival predator throws in their own bid. They would want to be ready to gate crash any party – or maybe even initiate one of their own.
So, spare a thought for Winters and his team. As if they do not have enough on their plate, trying to rebuild an undervalued bank but now they are also destined to spend 2023 having sleepless nights and catching a fright each time their mobiles vibrate – wondering if, when or where a predator might pounce. They know that StCh is now firmly in play.
Frank Vein: Founder, Future Capital www.futurecapital.global