Sources told Reuters that Hong Kong-based Chong Hing Bank Ltd has received a potential merger and acquisition offer from a third party. The takeover approach was said to be from Yue Xiu Enterprises, a firm under the control of the Guangzhou city government. While negotiations were confidential, the person familiar with the matter said that the transaction could be worth about twice the Hong Kong bank's price to book ratio of 1.32. Reuters reported that this would put Chong Hing's price tag at USD 2.27 billion. If the deal pushes through, it will the first M&A since 2008 in Hong Kong's banking sector.

News of the approach buoyed Chong Hing shares which rose to 23.4% after Liu Chong Hing Investment Ltd, its major shareholder, announced that it received the approach. Chong Hing is partly-owned by the Mitsubishi UFJ Financial Group Inc, Japan's top lender. It is a family-run bank, the smallest in Hong Kong.