China’s insurance regulator asked Ping An Insurance (Group) Co. (2318) for more information about HSBC Holdings Plc (HSBA)’s proposed $9.4 billion sale of a stake in the country’s second-largest insurer.
The China Insurance Regulatory Commission has conducted a preliminary review of the application, the watchdog said in an e-mailed statement today. It didn’t give any details about the information requested.
The sale to Thai billionaire Dhanin Chearavanont’s Charoen Pokphand Group Co. is facing speculation that regulators may reject the deal, Mancy Sun and Ning Ma, analysts at Goldman Sachs Group Inc., wrote in a note. China Development Bank, which agreed to fund part of the purchase, canceled its loans because of problems with the rest of the financing, Caixin has reported.
“The regulator’s statement should have a positive impact on Ping An shares, as it reads like the deal can still possibly go through,” said Qiu Peng, a Shanghai-based investment manager at Western Securities Co. “While the success or failure of the deal has little impact on Ping An’s operations, an early solution will remove some uncertainty about a key shareholder.”
Shares in Ping An fell 1.4 percent to HK$67.80 at the close of Hong Kong trading today, after gaining as much as 1.3 percent. HSBC gained 0.6 percent, the same as the benchmark Hang Seng Index.
HSBC said Dec. 5 it agreed to sell its 15.6 percent holding in Ping An to four subsidiaries of CP Group in two phases. The first stage, comprising shares valued at about HK$15 billion ($1.9 billion), was scheduled for Dec. 7. The sale of the remaining shares requires approval from CIRC by Feb. 1, or an extension of the accord.
“If the deal can’t get CIRC approval by then or if the deadline is extended, the chance of it going through is very slim,” Li Wenbing, a Beijing-based analyst at BoCom International, said by telephone.
Gareth Hewett, a spokesman for HSBC in Hong Kong, declined to comment on the CIRC statement. The transaction complies with the Hong Kong stock exchange’s regulations and will be financed by four units of Charoen Group, the Thai company’s Assistant Vice President Suthana Hongthong said.
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