see the paper losses here
The sale ends months of speculation about whether the Khoo family would exit following the death two years ago of the family patriarch Khoo Teck Puat, who held a 13 per cent stake in Standard Chartered.
The death of Mr Khoo in 2004 triggered speculation that his heirs might dispose of the stake, which could in turn trigger a full blown takeover battle for the UK-based bank.
Mervyn Davies, chief executive, has been credited as having improved the bank’s performance in the past few years
When he took over in 2001, Mr Davies set stringent new targets for the bank, including improving return on equity (RoE) from 12.3 per cent in 2001 to 20 per cent.
He also beefed up risk management and restructured the wholesale bank, reducing lending to corporates that consumed large amounts of capital but delivered low returns.
The bank, which reported a 19 per cent rise in pre-tax profits to $2.68bn for 2005, has seen shares rise by 50 per cent in the past year
StanChart acquired Korea First Bank for £1.8bn last year and Mr Davies has been “delighted” with the acquisition which contributed pre-tax profits of $227m in nine months last year.
To date the Khoo family have been supportive of the current management team. However last year there were signs of friction between the Khoo family and StanChart’s management.
The family refuted comments made by Bryan Sanderson, StanChart chairman, suggesting they were unlikely to sell the stake and asked StanChart to “refrain from further speculating on this issue”.
They said they had “not given any indication of their intentions for the stake to Standard Chartered and neither will they comment on Mr Sanderson’s own interpretation of the trustees’ intentions”.
Temasek has been negotating with the Khoo family about purchasing the stake for the past few weeks and Standard Chartered executives were fully informed about the talks.
Temasek is understood to have indicated that it is optimistic about Standard Chartered’s growth prospects and expects the bank’s shares to carry on rising.
In the past year, the shares have risen by more than 50 per cent.
The Khoo family have been sounding out potential buyers for the stake for some time, prompting speculation that large US banks such as Citigroup, JPMorgan Chase or Bank of America might use the shareholding as a base from which to launch a full takeover bid for Standard Chartered.
However the bank’s executives, led by Mervyn Davies, have consistently indicated that they believe the bank does not need to be part of a larger group to thrive.
