Kleinwort Benson turns to Oddo for counter bid to fend off Fosun
China’s Fosun International faces growing doubts about its ambition to expand into the European banking sector amid signs that its aggressive acquisition spree is running out of steam.
The Belgian owner of Kleinwort Benson is seeking to repel a hostile €675m bid from Fosun, its biggest shareholder, by encouraging France’s Oddo & Cie to make a “white knight” counter offer, said two people familiar with the matter.
Fosun, China’s largest private conglomerate that models itself on Warren Buffett’s Berkshire Hathaway, is also in talks to buy Novo Banco, the Portuguese bank created from the wreckage of Banco Espírito Santo last year.
But a person familiar with the situation said the auction of the Portuguese bank was likely to collapse after the exit earlier this week of Anbang Insurance, another Chinese group that had been the highest bidder.
Both Fosun and Anbang have been snapping up assets across Europe’s financial services industry in recent years, including insurers in Portugal, Belgium and the Netherlands.
But one investment banker who has dealt with both groups on a recent sales process said the sharp fall in Chinese stock markets seemed to have reduced their appetite for European acquisitions.
Fosun’s Hong Kong-listed shares have fallen sharply in line with a 40 per cent drop in the Shanghai Composite index from its June 12 peak.
The banker said he suspected the group was facing political pressure in China to invest in its domestic market to prop up local asset prices, potentially at the expense of doing deals in Europe. Fosun declined to comment.
Oddo & Cie, the French asset manager, has been considering making a counter bid for BHF Kleinwort Benson, the Belgian company in which it holds a sizeable stake, to challenge an indicative offer made by Fosun. Oddo and BHF Kleinwort Benson declined to comment.
As well as Kleinwort Benson, one of the City of London’s oldest names in finance, the Belgian-listed company also owns a banking licence through its acquisition last year of BHF, the German private bank.
Fosun is already the biggest shareholder in BHF Kleinwort Benson, having built up a 19.5 per cent stake in the group. It recently agreed to buy the stake held by Tim Collins, the US private equity investor, to increase its holding beyond 28 per cent.
Oddo is likely to wait until Fosun submits a formal takeover bid before deciding whether to make a bid of its own. The French group recently expanded in Germany via the acquisition of Meriten, the Düsseldorf-based arm of BNY Mellon.
Two people familiar with the matter said Fosun had launched its bid after falling out with Lenny Fischer, the former Credit Suisse banker who is chief executive of BHF Kleinwort Benson.
Shares in BHF Kleinwort Benson have risen well above Fosun’s €5.10 offer price and closed at €5.50 on Wednesday, indicating that investors believe a higher bid will be forthcoming. Other large shareholders include Franklin Templeton, BlackRock and Aqton, the investment vehicle of Germany’s Quandt family.