First Abu Dhabi not evaluating offer for Standard Chartered

FAB announced in January that it had previously been at the "very early stages" of evaluating a possible offer for StanChart but that it was "no longer doing so".

However, StanChart shares surged on Thursday after Bloomberg reported that FAB was pressing ahead with a potential offer for the bank.

It said that under the code name Silver-Foxtrot, officials at the Abu Dhabi bank were working under the radar on a possible bid once a cooling off period required by UK takeover rules elapses.

Bloomberg reported sources as saying that FAB was exploring an all-cash bid in the range of $30bn to $35bn.

"First Abu Dhabi Bank PJSC notes the recent press speculation in relation to Standard Chartered and re-iterates that it is not evaluating a possible offer for Standard Chartered," it said on Friday.

At 0830 GMT, the shares were down 5.3% at 726.60p.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said there is still speculation the deal will go through.

"’Given that Standard Chartered has such a large footprint in emerging markets with its operations in 59 countries, and is highly active across the Middle East, it’s clear why speculation about a First Abu Dhabi Bank takeover reached fever pitch given the opportunities presented," she said,

"However, there are still risks ahead, given that the group has large exposure to commercial real estate debt in China, with related impairment charges chipping away at profit's full potential. Although this may be part of the reason why FAD is for now steering clear, it’s also likely to be down to takeover rules. After FAB first announced in January it was stepping away from any offer, a six-month cooling off period kicked in, which means it is not meant to do any more deal work.

"Although the share price has fallen back, it remains highly elevated, far above the level it was before rumours began swirling at the start of the year. There clearly is a great deal of speculation that First Abu Dhabi may move again, once the cooling off period ends in July. There are still plenty of question marks surrounding a full takeover. It would be a very big undertaking, because the huge and intricate footprint means a mammoth amount of regulatory work would be needed to complete on any deal."