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Standard Chartered shares jump as much as 20% after First Abu Dhabi Bank takeover report

(Yui Mok/PA) (PA Archive)
(Yui Mok/PA) (PA Archive)

The financial sector lit up the FTSE 100 after a report of international bid interest in Standard Chartered, which sent shares in the emerging markets lender up by as much as 20%.

Bloomberg News reported that First Abu Dhabi Bank was preparing to bid for the City stalwart, but there followed a swift denial from the company named as the potential buyer, and StanChart’s shares came off day-highs to stand just over 6% higher at 704p.

The UK bank is a major presence in emerging markets, operating in 59 countries from almost 800 branches and was set up in 1853 in South Africa before opening its first branches in India a few years later. It is the only international bank operating in every member of the Association of Southeast Asian Nations. It is also active across the Middle East, including the United Arab Emirates, Saudi Arabia and Qatar.

The Bloomberg report did not identify sources, citing “people familiar” with the potential bid. First Abu Dhabi bank issued a statement saying they are no longer evaluating a possible takeover.

Standard Chartered retained its place as the day’s biggest single gainer on the FTSE 100 . Wider bid speculation pulled other big-name financial stocks onto the leaderboard, including HSBC, up almost 3% and Barclays, up almost 2%.

The relatively weak level of the pound makes cross-border takeovers of major UK companies more cost effective, leading to speculation that there could be a wave of takeover activity in 2023, even after sterling’s rebound in the latter part of last year.

Overall, London’s main stock index was up 34 points at 7624.0 in afternoon trade, rise of 0.5%, with heavily-weighted financial stocks helping extend its new year rally.