China Merchants Bank to buy Hong Kong's Wing Lung Bank

HONG KONG: China Merchants Bank Co. will buy Wing Lung Bank Ltd. in a deal valuing the Hong Kong lender at US$4.7 billion (euro3.0 billion), it was reported Friday.

China Merchants Bank won a bidding war for the family-owned bank by offering 156.5 Hong Kong dollars (US$20.05; euro12.89) a share, Dow Jones Newswires said, citing an unidentified person familiar with the deal.

The sale price is equivalent to 3.1 times Wing Lung's book value at the end of the first quarter in 2008, and 2.9 times its book value at the end of last year.

That's slightly below what the bank's owners and controlling shareholders, the Wu family, had requested for their 53 percent stake.

Other bidders included Industrial & Commercial Bank of China Ltd. and Australia & New Zealand Banking Group, according to people familiar with the matter that were not identified.

JPMorgan Chase & Co. is advising China Merchants Bank on the deal, and Credit Suisse Group and UBS AG are jointly coordinating the sale of the family's stakes.