Proposing full acquisition of Bank Internasional for RM8.6b
Malayan Banking Berhad (MBB) proposed to buy 75% and 25% of Sorak Financial Holdings Pte Ltd for Rp10.4 trillion (or RM3.6b) and Rp 3.5 trillion (RM1.2b) from Temasek Holdings and Kookmin Bank respectively. Sorak's principal investment is a 55.7% stake in listed PT Bank Internasional Tbk (BII). The purchase is conditional upon MBB passing the fit and proper test as stipulated by Bank Indonesia, and approvals from Bank Negara Malaysia (received 25 Mar 2008) and shareholders of MBB (via a simple majority in an EGM). The acquisition should be completed within 6 months. Upon completion, MBB is obliged to make a tender offer
for the remaining 44.3% of BII. The total amount for the tender offer is Rp 11.0 trillion (or RM3.8b). All in, the purchase of a 100% stake in BII will cost MBB RM8.6b cash.
Good yields, sound fundamentals and high ROEs
Following the recent decline of the share price, we are upgrading MBB to BUY.
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Tuesday, 1 April 2008
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