HSBC calls off Nedbank bid

15th Oct 2010 10:14

HSBC has walked away from its £5bn bid for South African bank Nedbank.The bid was expected to see HSBC take a controlling 70% stake in the bank, including Old Mutual's current 52% stake in the company.The two-month period of exclusive talks between the two groups is due to expire this weekend, when HSBC can expect new competition from rival bidders. HSBC departing chief executive Michael Geoghegan had instigated the initial bid to tap in to the rapidly emerging African market.However, the group is not in a position to make an offer after due diligence in Nedbank's operations resulted in unexpected complexities.UK financial services company Standard Chartered is said to be interested in bidding as there were rumours that its recent £3.3bn rights issue was to be used for an acquisition. The bank since rejected the claims stressing that the funds were to increase capital reserves in line with the Basel III regulations.Old Mutual would use the stake pay-out to aid its £1.5bn debt, so if both bidders drop out it will be seen as a blow to the savings and investment group.Old Mutual's shares have already taken a tumble of 5.5% this morning.