8 November 1999
HSBC PLANS TO PROCEED WITH ACQUISITIONS OF
REPUBLIC NEW YORK CORPORATION AND
SAFRA REPUBLIC HOLDINGS S.A.
HSBC Holdings plc ("HSBC"), Republic New York Corporation ("RNYC") and Safra
Republic Holdings S.A. ("SRH") and ▇▇ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇ ("▇▇ ▇▇▇▇▇") have reached
agreement to proceed to complete the proposed acquisitions of RNYC and SRH by
HSBC. Depending on regulatory approvals and RNYC shareholder approval being
obtained and the fulfilment of other conditions, closing is targeted to take
place by year end. It is expected that supplemental proxy materials will be
mailed to RNYC stockholders later this week in connection with the adjourned
RNYC stockholders meeting scheduled for 30 November 1999 to consider the
transaction.
Under the agreement, ▇▇ ▇▇▇▇▇ personally will accept a reduction of USD450
million in the aggregate amount he will receive for his shareholding in RYNC.
(▇▇ ▇▇▇▇▇ holds, through corporate interests, shares representing 29 per cent
and 21 per cent of the issued share capital of RNYC and SRH respectively.) For
other shareholders the financial terms of the acquisitions remain unaltered at
USD72 per share for each of RNYC and SRH. ▇▇ ▇▇▇▇▇ has also confirmed his full
support for the integration of RNYC and SRH into the HSBC Group and has
undertaken to assist personally in ensuring a smooth transition for existing
clients and in the establishment of a new, international private banking brand
to be named HSBC Republic.
▇▇ ▇▇▇▇▇, commenting on the unprecedented act of personally accepting USD450
million less for his interest in RNYC, said, "I am taking this action because I
believe that a swift completion of the transaction will be to the benefit of
Republic's clients, shareholders and employees to whom my life's work has been
devoted."
Arrangements have also been agreed between HSBC and ▇▇ ▇▇▇▇▇, the effect of
which is that, should certain potential liabilities arising from the Princeton
Note situation result in losses to RNYC that exceed an agreed amount, ▇▇ ▇▇▇▇▇
would bear up to USD180 million of such excess losses.
▇▇ ▇▇▇▇▇ added: "Both Republic and HSBC have always acted to maintain the
highest reputations for their institutions. This is just one more example of the
character of both organisations. I am excited for our clients and employees who,
after this transaction, will have access to all the resources of one of the
strongest financial institutions in the world. Not only will I become a major
client of HSBC, but I also intend to take an active role in ensuring a smooth
transition for all our existing clients."
HSBC Group Chairman, ▇▇▇ ▇▇▇▇ ▇▇▇▇, said: "I am pleased that, after a period of
uncertainty, we have found a way forward. We have the greatest admiration for
▇▇▇▇▇▇ ▇▇▇▇▇ taking personal action which embodies the spirit and integrity of
▇▇▇▇▇▇ and the franchise he has built.
"When we announced our intention to acquire RNYC and SRH in May this year we
described the benefits to HSBC customers and shareholders of effectively
doubling our international private banking business and extending significantly
our US domestic personal and commercial banking business. The alleged
irregularities which have delayed closing the acquisition occurred in a division
of a securities subsidiary which was unrelated to the core businesses of RNYC
and SRH. The strategic reasons for the acquisitions going ahead remain
compelling."
For further information, please contact:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Group Corporate Affairs Group Investor Relations
Tel: ▇▇▇▇ ▇▇▇ ▇▇▇▇/6757 Tel: ▇▇▇▇ ▇▇▇ ▇▇▇▇