KUALA LUMPUR (Sept 8): Public Bank Bhd (KL:PBBANK) is proposing to privatise its 73.23%-owned Hong Kong-listed subsidiary Public Financial Holdings Ltd (PFHL) for a cash consideration of HK$2.50 (RM1.29) per share.
The exercise will cost Public Bank about HK$734.75 million to acquire the remaining 26.77% stake comprising 293.9 million shares, according to the group in a bourse filing on Tuesday.
The offer price will not be increased, the bank said. The exercise will be carried out via a court-sanctioned scheme of arrangement, where all shares held by minorities will be cancelled and new shares issued to Public Bank to make PFHL a wholly-owned subsidiary.
The offer represents a 61.29% premium to PFHL’s last traded price of HK$1.55 on Aug 19 and a 83.82% premium over the stock's average daily closing price of HK$1.44 over the last 360 trading days. Trading of the stock has been halted since Aug 20 to make way for the announcement.
However, the offer also marks a steep 64.64% discount to PFHL's unaudited consolidated net asset value of HK$7.08 per share as of June 30.
PFHL’s businesses include banking and financial services, stockbroking, investment property leasing, financing for taxi and public light-bus purchasers, as well as taxi trading and leasing. Its banking unit operates 29 branches in Hong Kong and one in China, according to its website.
Public Bank said the privatisation would give minority shareholders an opportunity to realise their investments at a premium, noting PFHL shares have historically traded at persistent, deep discounts of between 74% and 85% to book value over the past two years amid low trading liquidity.
For Public Bank, the exercise would eliminate costs and administrative burdens associated with maintaining PFHL's listing, simplify corporate structure and allow resources to be focused on the group's core banking operations. It expects the exercise to be earnings-accretive and contribute to its future earnings.
For the six months ended June 30, 2026, PFHL's net profit jumped to HK$25.19 million from HK$2.57 million in the previous corresponding period, as operating income climbed to HK$692.22 million from HK$685.16 million. For the full year ended Dec 31, 2025, it made a net profit of HK$79.65 million, as opposed to a net loss of HK$999.39 million in 2024.
The proposal is subject to, among others, an approval by at least 75% of the votes cast by PFHL's disinterested shareholders at a court-convened meeting.
Public Bank shares closed unchanged at RM5 on Tuesday, giving the group a market capitalisation of RM97.05 billion.