CONFIDENTIAL
- It was announced on 24 April that Mr Christopher Patten
(Chairman of the Conservative Party) will take over as
Governor of Hong Kong sometime during July 1992.
Hong Kong and Shanghai Bank (May need updating)
- On 14 April, Hong Kong and Shanghai Bank Holdings and
Midland Bank announced the terms of a recommended offer by
HSBC Holdings for Midland shares at 378p. UK media reaction
was extensive and less than enthusiastic. Reaction of most
commentators was that the offer is on the low side, and was
contrasted with an expected level of about 400p. This led
to renewed speculation that Lloyds may make a counterbid or
that HSBC will be forced to go higher.
The offer was the culmination of several weeks negotiation
between the Bank of England and HSBC over the Bank of
England's supervisory requirements. Problems have been in
three areas: the move of the HSBC's "mind and management"
to the UK, the composition of the HSBC Group Board to
reflect that it would be a UK bank, and the structure of the
new group reflecting the Bank of England's concern over
taking on regulatory responsibility for HSBC's operation in
Hong Kong and a far flung network of small branches.
Discussions between the Bank of England and HSBC continue.
The proposed takeover requires the approval of the Bank of
England (under the Banking Act 1987) and the competition
authorities (almost certainly the European Commission under the European Merger Commission).
ALKADA/4
CONFIDENTIAL
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