Asia Flash: Bank of East Asia – the upside is massive and something is going on

Shares in Hong Kong’s family owned Bank of East Asia (BEA) have jumped nearly 30% since the Financial Times’ Beijing correspondent Don Weinland reported on 2 June that a strategic review announced in March has led to “early discussions with financial and strategic investors about the sale of the bank’s Hong Kong and China banking businesses”.

Banker activism or shareholder activism?

Shares in Hong Kong’s family owned Bank of East Asia (BEA) have jumped nearly 30% since the Financial Times’ Beijing correspondent Don Weinland reported on 2 June that a strategic review announced in March has led to “early discussions with financial and strategic investors about the sale of the bank’s Hong Kong and China banking businesses”.

Almost immediately following the report BEA, which has been in an on and off legal battle with 7.5% shareholder and activist Elliott Management for years, said it has had “no external discussions” regarding such disposals and “no decisions have been made with regard to any strategic alternatives.” It said an update to the review will be announced by 30 September.  

Perhaps BEA has not spoken to third parties. But could someone privy to the review process have been talking?

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by Vivian Wong and Derek Li