Valuation and Fairness Opinion for Development Bank of Singapore’s Acquisition of Dao Heng Bank

Transaction

• As the pace of consolidation in the Hong Kong banking sector intensified, the Development Bank of Singapore (“DBS”) launched a recommended offer for Dao Heng Bank (“DHB”), the third largest publicly-owned bank in Hong Kong

Challenges

• DHB was an extremely attractive asset given its size and reputation, and following announcement of the deal, there was a great deal of speculation amongst market analysts that instead of a privately-negotiated deal with DBS, the family owners of DHB should conduct a wider auction for the company

Solution

• Principals of FocalPoint were retained to perform a full valuation and fairness opinion of the value that DBS was prepared to offer DHB shareholders
• The valuation process was completed as part of a wider strategic alternatives study that examined
  • The underlying valuation of the DHB business
  • The strategic or unique value that DHB presented given its market position and strengths
  • Valuations achieved in similar transactions to date
  • The potential value another bidder might assign to DHB
• As a result of the valuation opinion, the board of directors was able to unanimously recommend the DBS offer as being fair and reasonable to its shareholders