Maan Abdul Wahed al-Sanea, Saudi Arabian billionaire, has become the second biggest stakeholder in Europe’s biggest bank, HSBC. He has acquired a £3.3 billion stake in the bank over a period of last two months. Yesterday, HSBC’s shares rose 1.3% to 930 pence as the official announcement of the news came in.
Mr. Maan has acquired a £3.3 billion stake represented by 360 million shares that he has purchased through Cayman Islands-based investment company Singularis Holdings. This stake represents 3.1% of HSBC’s entire worth and only Deutsche Bank, which holds a 3.25% stake, now betters Maan al-Sanea.
He had been amassing this stake since mid February. Around same time, HSBC’s shares had taken a beating when it issued its first ever profit warning in its 142-year-old history because of growing problems with US mortgages. He took advantage of this plummet and started increasing his holdings. However, his holdings had to be officially disclosed only when they surpassed the 3% limit.
Singularis spokesman had this to say:
It’s definitely a long-term investment, the focus has been on expending their exposure to this sector. They are keen on the sector and saw that HSBC’s share price was at a discount to what in their view the value should be. It’s a company they have looked at for a long time, done a lot of due diligence on, believe in the fundamentals and are confident in the management.
Maan Abdul Wahed al-Saena- a brief history
The latest Forbes list of the world’s billionaires places Maan Al-Sanea at 97th position with an estimated worth of US$7.5 billion. He is the co founder of Saudi conglomerate Saad Group worth over $4 billion. The group’s business ranges from construction and banking to education and health.
He is a self-made billionaire of modest origins. He started as an air-force pilot and married Sana bint Abdul Aziz Al Gosaibi, with whom he founded the Saad Group in 1980. The company initially was involved in construction business and was contracted extensively with the rebuilding of Jeddah’s infrastructure and its beautification. It later diversified into several other businesses.
Mr. Maan holds considerable stakes in several other companies. Amongst them are Bank of China, Citigroup, and Berkely Group Holdings (property developer.)
What I think
Mr. Maan has already netted a profit of £33m on his investment on account of a rise in HSBC share prices of 1%. But, this is an investment made with an eye on future. The market reaction to HSBC’s problems in the US was exaggerated and he made good use of the opportunity to get the shares at considerably low rates (52-week low of 867 pence.)
This deal is good news for HSBC as well, and it can now use the business clout of Saad group to increase its presence in the markets of Middle East. Mr. Maan is not viewed as a hostile stakeholder and senior management of HSBC is understood to have spoken to him and is equally relaxed about his stake building.
On the face value alone, I would rate this deal a ‘win-win’ for both the parties involved.
Source: telegraph
