Standard Chartered (LON:STAN) is kicking off a sale process for its loss-making private equity unit, Bloomberg has revealed. The news came after the Asia-focused lender updated investors on its full-year performance last month, posting a surge in pre-tax profits and resuming paying dividends.
Standard Chartered’s share price has fallen deep into the red in today’s session, having given up 1.67 percent to 734.60p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.51 percent lower at 7,003.42 points. The group’s shares have added a little over one percent to their value over the past year, as compared with about a 4.4-percent dip in the Footsie.
Private equity unit sale process
Sources with knowledge of the matter told Bloomberg that StanChart had sent teaser documents on its Private Equity unit to gauge interest from potential suitors, including other buyout firms in Asia. One of the people noted that more detailed information about the unit, which manages about $3.5 billion in assets, is expected to be distributed to interested parties in the next few weeks. The sources further pointed out that there was also a possibility that the current management of the division would partner with other companies to buy the assets.
While the private equity unit was initially profitable, its fortunes started to turn in late 2015 partly on account of the slump in the oil price.
Analysts on Standard Chartered
Credit Suisse reiterated its ‘underperform’ stance on StanChart this week, valuing the shares at 610p, while earlier this month, Barclays initiated coverage of the Asia-focused group with an ‘underweight’ rating and a price target of 685p. According to MarketBeat, the FTSE 100 group currently has a consensus ‘hold’ rating and an average valuation of 770.27p.
As of 10:44 GMT, Thursday, 22 March, Standard Chartered PLC share price is 730.60p.