HSBC Says Separation of Business Would Lead to Loss of Material Value for Shareholders

By Anthony O. Goriainoff

HSBC Holdings PLC said Wednesday that a structural reconfiguration of HSBC Asia Pacific would be a material value loss for shareholders and advised shareholders to vote against the resolution at the annual meeting in London on May 5.

The London-listed lender said that it has had over 20 meetings with major HSBC shareholder Ping An Insurance (Group) Co. of China Ltd. over 2022 and this year.

HSBC said that the board has assessed HSBC Asia Pacific's structural options with an open mind and along with its advisors, financial, legal and accounting analysis, and discussed its conclusions for HSBC Asia Pacific with Ping An.

The bank said its strategy was working and delivering improving returns and that it was sure it would return dividend per share to prepandemic levels. Furthermore it would consider a special dividend of $0.21 a share to be paid in 2024, subject to HSBC Canada's disposal completion.

On Tuesday Ping An watered down its initial proposal for a spinoff for the bank's Asian business to a "strategic restructuring solution." It said this would let HSBC keep a controlling stake in a listed, Hong Kong-based unit and address HSBC's concerns.

Ping An has for more than a year pressed for a shakeup to boost HSBC's stock. Ping An owns roughly 8.3% of HSBC, according to FactSet.

Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com

(END) Dow Jones Newswires

April 19, 2023 11:50 ET (15:50 GMT)

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