PUBLIC Bank Bhd is looking to privatise its Hong Kong-listed subsidiary, Public Financial Holdings Ltd, by acquiring the remaining 26.8% stake it does not currently own for HK$2.50 (about RM1.29) per share in cash.
Public Bank currently owns 73.23% of PFHL. The proposed exercise is expected to involve approximately HK$734.8mn (RM380mn) to acquire the 293.9mn shares held by minority shareholders.
The privatisation will be carried out through a court-sanctioned scheme of arrangement, under which the shares held by minority investors will be cancelled in return for the cash consideration.
Once the exercise is completed, Public Bank will issue new shares, resulting in PFHL becoming a wholly owned subsidiary of the banking group.
At HK$2.50 per share, the offer represents a 64.6% discount to PFHL’s unaudited net asset value of HK$7.08 per share as of 30 June 2026.
However, Public Bank said the proposal gives minority shareholders an opportunity to unlock the value of their holdings at a substantial premium, particularly in view of PFHL’s historically thin trading liquidity and prolonged valuation discount.
The offer price is equivalent to a 61.3% premium over PFHL’s last traded price of HK$1.55 on 19 August.
It also represents an 83.8% premium to the subsidiary’s average closing price of HK$1.44 over the previous 360 trading days.
PFHL has a diversified portfolio of financial services businesses in Hong Kong.
Its operations include commercial banking, stockbroking, investment property leasing, financing for taxi and public light-bus operators, as well as taxi trading and leasing.
Its banking arm currently operates 29 branches across Hong Kong, along with another branch in mainland China.
PFHL’s financial performance has also shown a notable turnaround in recent periods.
Net profit for 1HFY26 rose almost tenfold to HK$25.2mn from HK$2.6mn a year earlier, supported by stronger operating income.
The improvement follows PFHL’s return to profitability in FY25, when it recorded a net profit of HK$79.7mn, compared with a substantial net loss of HK$999.4mn in FY24.
Despite the significant recovery in PFHL’s earnings, its contribution to Public Bank’s overall financial performance remains relatively modest.
Consequently, the proposed privatisation is not expected to have a meaningful impact on the group’s earnings in the near term.
However, bringing PFHL fully under the Public Bank umbrella could improve operational efficiency and streamline the group’s corporate structure, while giving it greater flexibility in managing its Hong Kong operations over the longer term.
The proposed transaction is still subject to a number of conditions, including approval from PFHL shareholders and the relevant regulatory authorities.
For the scheme to proceed, at least 75% of the votes cast by disinterested shareholders at the court-convened meeting must be in favour of the proposal.—Sept 9, 2026
Main image: asianbankingandfinance.net
