ABN-AMRO takes up 20pc stake in HG Asia
AMERICAN investment bank Smith Barney has sold its 20 per cent stake in HG Asia Group to Dutch giant ABN-AMRO Bank, which is considering taking a majority stake in the broker.
'In the coming months, ABN-AMRO Bank, together with HG Asia's shareholders, will be investigating the possibilities of closer co-operation with a view to ABN-AMRO Bank acquiring a majority stake in HG Asia,' ABN-AMRO said last night from Amsterdam.
Smith Barney said it had sold its stake because it was increasing its sales and research activities in competition with HG Asia and had reservations about holding two seats on the board of HG Asia in those circumstances.
The other two shareholders in HG Asia are Guoco Group and the management of HG Asia, each with 40 per cent.
'What we want to do is expand our equity-driven business worldwide and we felt we were missing out in Asia,' said Len Steffen, senior vice-president and general manager with ABN-AMRO in Hong Kong.
'So it's an extension of what we've been doing in Europe, where we bought [British broker] Hoare Govett a few years back. It's part of our global strategy to become a major bank in equity markets.' HG Asia Group was associated with 12 Asian stock exchanges and employed about 390 people, ABN-AMRO said.
It was bought out by management after ABN-AMRO's 1992 purchase of its then-parent Hoare Govett.
ABN-AMRO had a presence in 13 Asian countries, and employed about 40 people in Hong Kong in ABN-AMRO Securities (Far East) and ABN-AMRO Capital Markets (Far East).
ABN-AMRO Securities managing director Robert Lindo refused to say on what would happen to the company or ABN-AMRO Capital if the bank lifted its stake in HG Asia above 50 per cent, saying it was far too early to tell.
In a separate announcement, Smith Barney and HG Asia said: 'We have decided to maximise our objectives by working in a co-operative framework independent of a shareholding affiliation.' HG Asia spokesman Tim Kilpatrick said ABN-AMRO would take over Smith Barney's two seats on the board of HG Asia and played down the possibility of a takeover by ABN-AMRO.
'What has been said is that discussion may now take place with a view to that happening,' he said.
