DSR 11 (Revised Sept 85)
SECURITY CLASSIFICATION
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Confidential
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SECRET (ORIEL)
DRAFT: minute/letter/teleletter/despatch/note
FROM:
Private Secretary
DEPARTMENT:
BUILDING:
TEL. NO:
ROOM NO:
TO:
C D Powell Esq
No 10 Downing Street
Unclassified
PRIVACY MARKING
SUBJECT:
CAVEAT
In Confidence
TYPE: Draft/Final 1 +
Reference
You RAFEnce
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HONG KONG AND SHANGHAI BANK AND MIDLAND BANK
I am writing to let you know that the Hong Kong and
Shanghai Bank (HKSB) and the Midland Bank have just
reached agreement on the price at which HKSB can purchase
14.9% of the equity of the Midland Bank. An announcement
can be expected on 13 November.
Enclosures flag(s).
As part of the agreement Midland Bank will make a new
share issue worth £400 million. This will considerably
strengthen the Bank's equity base and put an end to its
vulnerability to an unwanted takeover. The agreement
will also have significant collaborative advantages for
both banks, enabling them to complement each other's
current activities in Europe and Canada. The agreement
therefore makes very good sense in commercial and banking
terms.
The Foreign Secretary believes that the agreement
also falls within the limits of what Ministers have
SECRET (ORIEL)