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China Life Insurance Co. (LFC) proposed buying a 10% stake in Wing Hang Bank Ltd. (0302.HK) from a Bank of New York unit last year, but the Hong Kong securities regulator ruled the deal would trigger a buyout offer from the family that controls the bank.

The deal didn't proceed following the ruling from the Securities and Futures Commission and it is unclear whether any talks on such an acquisition are still pending. Wing Hang and China Life both declined comment Wednesday morning.

At 0250 GMT, Wing Hang's shares were up 11% at HK$44.40, outperforming the benchmark Hang Seng Index's 2.2% rise.

BNY International Financing Corp. holds 20.28% of Wing Hang Bank, and China Life had proposed buying 10% from the BNY unit, the SFC said in a statement issued late Tuesday. At the same time, Hong Kong's Fung family, the largest shareholder in Wing Hang, had proposed buying 5% from the BNY unit, raising the family's stake to 28.58%, the SFC said.

Since the Fung family and BNY had a relationship going back 30 years, the SFC ruled that they and China Life would be acting together on the transaction. Since the combined stake would exceed 30%, the Fung family would have to make a general offer for the company.

The SFC said it had held off announcing its ruling at the request of the parties involved, who cited commercial sensitivities.

The SFC statement didn't mention a price of the transaction. But it said the offers were made in May and July, when the bank's shares typically were priced at more than HK$100.

-By Jackie Cheung, Dow Jones Newswires; 852-2802-7002; jackie.cheung@dowjones.com