Hedge Fund Elliott Sold Wing Hang Bank Shares for $387 Million

Aug 04, 2014 4:08 pm ET

Aug. 5 (Bloomberg) -- Elliott Management Corp., Paul Singer’s hedge-fund firm, sold shares in Wing Hang Bank Ltd. for HK$3 billion ($387 million) near the end of Oversea-Chinese Banking Corp.’s offer to take the lender private.

Elliott, with $24.8 billion of assets, sold its entire holdings of 24 million Wing Hang shares at HK$125 each off exchange on July 29, according to a filing posted on the website of Hong Kong’s stock exchange yesterday.

The firm, based in New York, had built up the 7.8 percent stake by July 2 amid the $5 billion offer by OCBC in Singapore to acquire the Hong Kong bank and take it private, according to a regulatory notice. Elliott sold the shares at the same price that OCBC offered.

The share sale represented a departure from Elliott’s past practices, which involved staying invested in some Asia deals for as long as more than four years, waiting for sweetened offers.

The latest notice appears to confirm that Elliott tendered the shares before the OCBC offer closed. About 1.3 million Wing Hang shares were traded on the stock exchange in the last week before OCBC’s offer closed on July 29.

Richard Barton, managing partner at Newgate Communications in Hong Kong, declined to comment on behalf of Elliott.

Elliott paid HK$125 each for 8.7 million Wing Hang shares on July 2, boosting its stake in the bank from just under 5 percent, according to a notice posted on the website of the city’s stock exchange. The hedge-fund company didn’t disclose at what price it bought the initial 15.3 million shares.

Powerful Families

OCBC, Southeast Asia’s second-largest lender, said in interviews and through exchange statements that it won’t raise the offer. OCBC boosted its Wing Hang stake to 97.5 percent by time the offer ended, more than the 90 percent regulatory threshold required for it to proceed with the privatization, according to a joint statement on July 29.

Elliott is no stranger to such so-called hold-out positions in Asia, pitting it against some of the region’s most powerful families. In April 2008, minority shareholders of Pacific Century Premium Developments Ltd., then 16 percent-owned by Elliott, blocked a buyout by parent PCCW Ltd. Pacific Century went on to declare a special dividend in 2010.

PCCW is controlled by Richard Li, son of Asia’s richest man Li Ka-shing. Elliott sold its stake in 2012.

In November 2007, Hong Kong builder Henderson Land Development Co. raised its bid for Henderson Investment Ltd.’s biggest asset. Elliott owned about 9 percent of Henderson Investment then. Henderson Land is controlled by billionaire Lee Shau-kee.

Elliott also has a 9 percent stake in Guoco Group Ltd., a Hong Kong-listed company being taken private by a group led by Malaysian billionaire Quek Leng Chan, according a filing to the city’s stock exchange.

Elliott’s oldest hedge fund returned a compounded annual net return of 14 percent for investors since its inception in 1977, according to a first-quarter fact sheet on the company.