PETALING JAYA: Public Bank Bhd has proposed to privatise its 73.23%-owned Hong Kong-listed subsidiary Public Financial Holdings Ltd (PFHL) for HK$2.50 per share in cash, which would value the acquisition of the remaining stake at about HK$734.75 million (RM378.61 million).
According to a filing with Bursa Malaysia on Sept 8, the proposed privatisation will be undertaken through a scheme of arrangement under Section 99 of the Companies Act 1981 of Bermuda, alongside the proposed withdrawal of PFHL’s shares from the Main Board of the Stock Exchange of Hong Kong Ltd (HKSE).
Under the scheme, all PFHL shares not already owned by Public Bank will be cancelled for HK$2.50 each, equivalent to approximately RM1.29 per share, with Public Bank issuing an equivalent number of new PFHL shares to itself. Upon completion, PFHL will become a wholly owned subsidiary of Public Bank and its listing on the HKSE will be withdrawn.
Public Bank currently owns 804.02 million PFHL shares, representing 73.23% of the listed unit, leaving 293.90 million shares, or 26.77%, held by other shareholders.
The proposed cancellation price represents a 61.29% premium to PFHL’s closing price of HK$1.55 on Aug 19, the last trading day before the announcement.
It also represents premiums of 78.57%, 81.16%, 73.61% and 83.82% to PFHL’s average closing prices over the preceding 30, 60, 180 and 360 trading days respectively.
However, the offer price represents a 64.69% discount to PFHL’s audited consolidated net asset value (NAV) of HK$7.07 per share as at Dec 31, 2025, and a 64.69% discount to its unaudited NAV of HK$7.08 per share as at June 30, 2026. Public Bank said the price was determined commercially after taking into account PFHL’s prevailing market prices and premiums in recent HKSE privatisation transactions.
Public Bank said PFHL’s shares had historically traded at substantial discounts to NAV, ranging from about 74% to 85% during the two years up to Aug 19, 2026. It added that the shares had relatively low liquidity, with average daily trading volume over the 12 months to Aug 19 representing only 0.027% of PFHL’s total issued shares, with average daily turnover of about HK$414,000.
PFHL is principally involved in banking and financial services, stockbroking, investment property letting, financing for taxi and public light bus purchasers, taxi cab and taxi licence trading, and taxi leasing.
For the six months ended June 30, 2026, PFHL recorded operating income of HK$692.22 million and profit for the period of HK$25.19 million, compared with operating income of HK$685.16 million and profit of HK$2.57 million in the corresponding period a year earlier. For FY25, PFHL’s profit stood at HK$79.65 million, compared with a loss of HK$999.39 million in FY24.
Public Bank said the privatisation would simplify PFHL’s ownership structure, allowing closer coordination between PFHL and the wider Public Bank group in areas including business planning, resource allocation and operational initiatives.
It also expects the move to eliminate costs and administrative burdens associated with PFHL’s listed status, allowing management resources to be redirected towards its banking operations and giving PFHL greater flexibility to pursue longer-term business plans without the pressures associated with being publicly listed.
The proposed exercise is expected to be earnings accretive for Public Bank. Based on an illustrative pro forma calculation using FY25 figures, Public Bank’s profit after tax attributable to its equity holders would increase from RM7.224 billion to RM7.231 billion after incorporating the additional earnings from the 26.77% stake in PFHL and estimated transaction expenses of RM5 million.
Its net assets per share would also rise to RM3.14 from RM3.10, while earnings per share would remain at RM0.37.
The proposals do not require approval from Public Bank shareholders. They are subject to approval of the scheme by PFHL shareholders at a court meeting and a special general meeting, sanction by the Supreme Court of Bermuda, approval from the HKSE for the withdrawal of PFHL’s listing and any other required regulatory approvals.
The conditions must be fulfilled or, where applicable, waived by March 8, 2027, failing which the proposals and scheme will lapse. None of the conditions had been fulfilled or waived as at Sept 8, 2026.
Public Bank said the board, excluding the interested directors, considers the proposals to be in the best interests of the group.
The interested directors are PBB chairman Lai Wan, who is also PFHL’s non-executive chairman; PBB independent non-executive director Lim Chao Li, who is also an independent non-executive director of PFHL; and PBB managing director and CEO Tan Sri Dato’ Sri (Dr) Tay Ah Lek, who is also a PFHL shareholder. They have abstained and will continue to abstain from deliberations and voting on the proposals.