DealZone

Deals wrap: Standard Chartered’s call for cash

A woman walks down the stairs of the Standard Chartered headquarters in Hong Kong October 13, 2010.    REUTERS/Bobby Yip  Standard Chartered launched a $5.3 billion rights issue to bolster its finances in response to Basel regulations and to take advantage of growth opportunities. The cash is not however a war chest for acquisitions, Chief Executive Peter Sands said. *View article *View analysis on the stringent new rules for banks *View article on other banks following Standard Chartered’s lead

China has the world’s largest IPO market this year and next year could be even busier if the government allows foreign companies to sell shares on its stock markets, an executive at Credit Suisse said. *View article

Matt Rosoff at Business Insider predicts a deal is still coming from Microsoft and Adobe. *View article

HSBC’s Asia opportunism

HSBC CEO Michael Geoghegan isn’t just furniture shopping for the big move back to Hong Kong.

The Wall Street Journal reports HSBC is in “advanced discussions” to acquire Royal Bank of Scotland’s banking assets in three Asian countries. The talks concern RBS’s retail and commercial banking assets in China, India and Malaysia, according to the report, which cited a person familiar with the situation.

In late September, HSBC decided to return its CEO to the place of the bank’s birth 144 years ago, as it refocuses on Asia. Europe’s biggest bank said it would stay based in London for tax purposes and had no plans to move, and Britain’s Financial Services Authority will remain its lead regulator. After the drama of Britain’s 1997 retreat from its lucrative colony, there are clearly still limits on just how Asian HSBC wants to be.

Own goal?

Standard Chartered bucks the trend of banks making a dash from sports sponsorship deals and will pay $130 million to put its name on Liverpool Football Club’s shirts for four years from next summer. It is one of the most lucrative deals in soccer history.But AIG, Citi, RBS and Northern Rock offer a stark reminder that big sports deals can be high-profile signals of waste. AIG sponsored Manchester United and RBS and ING pumped millions into Formula One, and Northern Rock was better known to millions as the sponsor of Newcastle F.C. than as a mortgage bank — until its collapse.Citi raised anger after sticking with a controversial $400 million deal with baseball team the New York Mets. All those banks needed taxpayer rescue funds.Critics say big sports deals can reflect poor corporate governance and misguided priorities. Advisory firm Advisor Perspectives this year said a study of 69 U.S. sports “naming rights” deals showed the performance of the companies buying the rights trailed the S&P 500 index by almost 5 percent over the course of the deal.But it could be a good fit for StanChart, which gets 80 percent of its profits in Asia. Liverpool is a big, iconic name in Asia and English Premier League games are screened into millions of homes each week. The prize for the bank is not the domestic or European fields where Liverpool has enjoyed regular success, but the potential customers in China, India, Indonesia, Thailand and across the region.At least there can be few complaints the bank’s board is following its heart. Former chairman and CEO Mervyn Davies was a staunch Spurs supporter, current CEO Peter Sands is an avid Arsenal fan and Finance Director Richard Meddings may have struggled to find a global reach with a deal with his beloved Wolverhampton Wanderers.

Asia’s allure

HSBC, perhaps the most Chinese of the big European banks, says it is in talks to set up an investment banking joint venture in China. Australia and New Zealand Bank and Asia-focused Standard Chartered have lined up opportunistic buys in Asia, picking up the pieces of imploded RBS. Even beaten-down Citigroup is talking about acquisitions … in Indonesia.

ANZ said it agreed to pay a smaller-than-expected $550 million to buy some Asian units from RBS. StanChart, just nine months after launching a 1.8 billion pound rights issue, unveiled a surprise 1 billion pound ($1.7 billion) share placement to give it firepower to grasp opportunities as Asia’s economies recover. The bank said it was in talks about small acquisitions in China and India likely to cost between $100 million and $200 million. We’re told those talks involve RBS assets.

HSBC’s move would allow it to expand into China’s domestic securities and debt markets, areas it is presumably well-placed to exploit, given its dominant role in Hong Kong finance. Asia chief Vincent Cheng said HSBC Hong Kong has enough capital for acquisitions, has looked into some RBS Asian assets but has found, in general, that Asian assets are too expensive. So it will focus on organic growth.