(MENAFN) Shares of Hang Seng Bank soared by more than 25% on Thursday following a major announcement from parent company HSBC, which revealed plans to take the Hong Kong-based lender private in a deal valuing it at over 290 billion Hong Kong dollars ($37.2 billion).

The proposed transaction would be executed through a scheme of arrangement under Hong Kong's Companies Ordinance, with HSBC asking Hang Seng Bank’s board to present the privatization proposal to shareholders.

“This offer is an exciting opportunity to grow both Hang Seng and HSBC,” said HSBC CEO Georges Elhedery. “We will preserve Hang Seng’s brand, heritage and customer proposition while investing to unlock new strengths in products, services and technology.”

Elhedery emphasized that the move reflects HSBC's strong confidence in Hong Kong’s role as a global financial center and its unique position as a "super-connector" between international markets and mainland China.

The proposal includes provisions for dividend adjustments declared after the announcement, except for Hang Seng's third interim dividend for 2025.

In a formal statement, HSBC reiterated that deepening its presence in Hong Kong remains a strategic priority, stating it is "best positioned" to achieve this by enhancing the banking capabilities of both Hang Seng Bank and HSBC Asia Pacific in the region.

Despite the bold move, investor sentiment toward the parent company dipped, with HSBC shares falling 5.8% as of 0815 GMT on Thursday.

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