Despite limited public support, efforts to break up HSBC persist with new research and analysis reportedly commissioned by Ping An estimating that $26.5 billion in market value could be unlocked.
A break-up of HSBC’s Asia unit could unlock $25.5 billion, according to U.K.’s «Sunday Times» citing a report by Toto Consultancy.
In addition, the report also underlined two other scenarios that could benefit shareholders including a spin-off of the Asian business or just the Hong Kong retail business into partial initial public offerings.
According to «Sunday Times», the report was independently commissioned by Ping An, HSBC’s biggest shareholder and the campaign leader for the British lender’s restructuring.
A spokesperson for Ping An declined to comment if it was behind the analysis.
Break-Up Campaign
In late April, Ping An reportedly held discussions with HSBC to separate its Asia arm to create shareholder value. The bank subsequently initiated an internal review and established a defense team that includes Goldman Sachs and boutique advisory firm Robey Warshaw.
Thus far, Ping An’s proposal has been met with lukewarm responses with most underlining worries that reduced diversification and global connectivity could ultimately hurt HSBC's value.
«It is sensible to engage in a deeper conversation about whether a more radical restructuring is necessary for HSBC to not only survive but thrive over the longer run,» said Asheefa Sarangi, managing director and founder of Toto Consultancy. «If HSBC leadership does not fully commit to successful execution, any such transaction would be doomed before it started.»
