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StanChart shares upgraded by CLSA on possible white knight takeover


[HONG KONG] Shares of Standard Chartered (StanChart) were upgraded by broker CLSA on expectations the UK bank's "challenging" recovery could lead to a takeover by a white knight.

Singapore's biggest lender DBS Group would be the most likely buyer, added CLSA in a note to clients dated on Dec 17. Asia-focused lender StanChart has seen its shares fall below a forward price-to-book value of 0.5 times this week, making it an appealing target.

"The bank's road to recovery will likely be a challenging multi-year journey. But the worse the situation gets for StanChart, we believe the more likely it is that a white knight will eventually emerge," CLSA analysts Asheefa Sarangi and Lester Lim wrote in the note.

StanChart didn't immediately respond to a request for comment, while DBS officials pointed to an interview of CEO Piyush Gupta in September when he ruled out the merger of the two banks.

Singapore state investor Temasek Holdings, the biggest shareholder for both StanChart and DBS, also declined to comment.