Showing posts with label Local M n A. Show all posts
Showing posts with label Local M n A. Show all posts
Thursday, August 18, 2011
Monday, February 14, 2011
Bidders for Khazanah’s Stake in Pos Malaysia to GoThrough Rigorous Process
Tuesday February 15, 2011
By RISEN JAYASEELAN
risen@thestar.com.my
PETALING JAYA: Khazanah Nasional Bhd will be putting the bidders for its 32.21% equity in Pos Malaysia Bhd through a vigorous process that includes a detailed assessment of the business plan and whether there will be a “cultural fit” between the new owners and the postal company.
Yesterday was the deadline for all bidders to submit their offer and sources close to the deal said the format required for the bids was broken up into a few parts.
One of them being the business plan, another the indicative offer price and a third being the background information on the bidder such as the name of shareholders (including the ultimate shareholders) and partners as well as financial information of all companies in the consortium.
“The offeror will first look at the business plan of the bidders together with the background information on them.
Khazanah requires a detailed assessment of the bidders’ business plan and whether the party taking over Pos Malaysia has the right model
Pricing is less of a focus at this point,” a source said, adding that Khazanah's interest was to ensure that the party taking over Pos had the right model in place.
“Of course price is important but that comes later,” the source said.
Once Khazanah vetted through all three aspects of the bids, including pricing, it was said to be also keen on ensuring that the bidder could work with the current management of Pos, the source added.
“It is likely that meetings will be held between the short-listed bidders and the management of Pos, with Khazanah sitting in,” an investment banker said.
The banker pointed out that the outcome of those meetings would have a bearing on the selection of the successful bidder for the stake.
The banker also said it was unclear how long this divestment process would take but added that the deal would likely be completed before the Invest Malaysia 2011 conference that was scheduled to begin on April 12 in Kuala Lumpur.
The 32.21% stake in Pos that is up for sale comes with management control of the company.
Khazanah had on Jan 18 announced the opening of bidding for its stake in Pos Malaysia through its adviser, CIMB Investment Bank Bhd.
But news of Khazanah's divestment of its stake in Pos had first surfaced in March last year at the sidelines of Invest Malaysia 2010 conference, where Prime Minister Datuk Seri Najib Tun Razak announced it.
It has been reported that one of the conditions for prospective bidders is that they must be 51% owned and led by a Malaysian company.
It has also been reported that the bidders include Tan Sri Syed Mokhtar Al-Bukhary, Sapura Group and Scomi Marine Bhd.
Khazanah managing director Tan Sri Azman Mokhtar told the media last month that the calling for bids for the Pos stake was part of the second stage of its divestment plan.
The first stage of the divestment plan was about ironing out regulatory issues such as the postage stamp hike and salary of postmen that were necessary to start the bidding process, he said.
“The next milestone would be the Postal Bill. Hopefully, it will go through in the next Dewan Rakyat sitting,” Azman was reported to have said.
Another issue with the Pos divestment has been the Government's golden share in the postal company, which gives it the right to override the board and management.
http://biz.thestar.com.my/news/story.asp?file=/2011/2/15/business/8063340&sec=business
By RISEN JAYASEELAN
risen@thestar.com.my
PETALING JAYA: Khazanah Nasional Bhd will be putting the bidders for its 32.21% equity in Pos Malaysia Bhd through a vigorous process that includes a detailed assessment of the business plan and whether there will be a “cultural fit” between the new owners and the postal company.
Yesterday was the deadline for all bidders to submit their offer and sources close to the deal said the format required for the bids was broken up into a few parts.
One of them being the business plan, another the indicative offer price and a third being the background information on the bidder such as the name of shareholders (including the ultimate shareholders) and partners as well as financial information of all companies in the consortium.
“The offeror will first look at the business plan of the bidders together with the background information on them.
Khazanah requires a detailed assessment of the bidders’ business plan and whether the party taking over Pos Malaysia has the right model
Pricing is less of a focus at this point,” a source said, adding that Khazanah's interest was to ensure that the party taking over Pos had the right model in place.
“Of course price is important but that comes later,” the source said.
Once Khazanah vetted through all three aspects of the bids, including pricing, it was said to be also keen on ensuring that the bidder could work with the current management of Pos, the source added.
“It is likely that meetings will be held between the short-listed bidders and the management of Pos, with Khazanah sitting in,” an investment banker said.
The banker pointed out that the outcome of those meetings would have a bearing on the selection of the successful bidder for the stake.
The banker also said it was unclear how long this divestment process would take but added that the deal would likely be completed before the Invest Malaysia 2011 conference that was scheduled to begin on April 12 in Kuala Lumpur.
The 32.21% stake in Pos that is up for sale comes with management control of the company.
Khazanah had on Jan 18 announced the opening of bidding for its stake in Pos Malaysia through its adviser, CIMB Investment Bank Bhd.
But news of Khazanah's divestment of its stake in Pos had first surfaced in March last year at the sidelines of Invest Malaysia 2010 conference, where Prime Minister Datuk Seri Najib Tun Razak announced it.
It has been reported that one of the conditions for prospective bidders is that they must be 51% owned and led by a Malaysian company.
It has also been reported that the bidders include Tan Sri Syed Mokhtar Al-Bukhary, Sapura Group and Scomi Marine Bhd.
Khazanah managing director Tan Sri Azman Mokhtar told the media last month that the calling for bids for the Pos stake was part of the second stage of its divestment plan.
The first stage of the divestment plan was about ironing out regulatory issues such as the postage stamp hike and salary of postmen that were necessary to start the bidding process, he said.
“The next milestone would be the Postal Bill. Hopefully, it will go through in the next Dewan Rakyat sitting,” Azman was reported to have said.
Another issue with the Pos divestment has been the Government's golden share in the postal company, which gives it the right to override the board and management.
http://biz.thestar.com.my/news/story.asp?file=/2011/2/15/business/8063340&sec=business
Thursday, June 17, 2010
Ekuinas To Acquire Significant Stake In Tanjung Offshore
June 17, 2010 20:35 PM
KUALA LUMPUR, June 17 (Bernama) -- Ekuiti Nasional Berhad (Ekuinas), the government-linked private equity fund management company, has entered into two agreements to acquire a 20 per cent stake in Tanjung Offshore Bhd for RM73.4 million.
It said the transaction involved the execution of a subscription agreement with Tanjung Offshore, one of Malaysia's emerging oil and gas total solutions provider, to subscribe to 26 million new shares of the company under a special share placement exercise.
Ekuinas said, in a statement today, that it also involved the acquisition of another 30.5 million existing shares, via a share sale agreement, with Tanjung Offshore's co-founder and former Executive Director Haji Abdullah bin Hashim and his affiliates.
Both transactions would be undertaken at RM1.30 per share and result in Ekuinas owning a 20 per cent stake of the enlarged capital in the company.
The transaction is primarily conditional upon the shareholders of Tanjung Offshore approving the share placement exercise to Ekuinas at an extraordinary general meeting to be held tentatively in the third week of July.
Meanwhile, Tanjung Offshore said, in a filing to Bursa, said the proposed private placement would also enable the company to raise funds to pare down its outstanding bank borrowings and finance its working capital requirements.
-- BERNAMA
http://bernama.com.my/bernama/v5/newsbusiness.php?id=506843
KUALA LUMPUR, June 17 (Bernama) -- Ekuiti Nasional Berhad (Ekuinas), the government-linked private equity fund management company, has entered into two agreements to acquire a 20 per cent stake in Tanjung Offshore Bhd for RM73.4 million.
It said the transaction involved the execution of a subscription agreement with Tanjung Offshore, one of Malaysia's emerging oil and gas total solutions provider, to subscribe to 26 million new shares of the company under a special share placement exercise.
Ekuinas said, in a statement today, that it also involved the acquisition of another 30.5 million existing shares, via a share sale agreement, with Tanjung Offshore's co-founder and former Executive Director Haji Abdullah bin Hashim and his affiliates.
Both transactions would be undertaken at RM1.30 per share and result in Ekuinas owning a 20 per cent stake of the enlarged capital in the company.
The transaction is primarily conditional upon the shareholders of Tanjung Offshore approving the share placement exercise to Ekuinas at an extraordinary general meeting to be held tentatively in the third week of July.
Meanwhile, Tanjung Offshore said, in a filing to Bursa, said the proposed private placement would also enable the company to raise funds to pare down its outstanding bank borrowings and finance its working capital requirements.
-- BERNAMA
http://bernama.com.my/bernama/v5/newsbusiness.php?id=506843
Wednesday, June 9, 2010
Pantai dismisses merger rumours
Friday March 5, 2010
By EDY SARIF
Chairman denies speculation of tie-up with Faber
edy@thestar.com.my
KUALA LUMPUR: Pantai Holdings Bhd has dismissed rumours of a possible merger between Faber Group Bhd healthcare management business, Faber Medi-Serve and Pantai Medivest Sdn Bhd, says chairman Tan Sri Mohamed Khatib Abdul Hamid.
“Both companies belong to the same parent company that is Khazanah Nasional Bhd. So why should we merge them both?” he said yesterday at a press conference after the launch of Preventive Healthcare and Collaboration Agreement between Pantai Holdings and Preventive Healthcare Sdn Bhd.
The collaboration would see Preventive Healthcare offering a comprehensive and unparallel range of checkups, medical specialist and dietician consultants along with electronic storage of all personal medical records for up to 15 years to Pantai hospitals.
Mohamed Khatib was commenting on news reports recently, quoting from sources that Pantai’s concession business might be sold.
From left: Tan Sri Mohamed Khatib Abdul Hamid, CEO of Malaysia Healthcare Travel Council, Health Ministry Datuk Ooi Say Chuan and Preventive Healthcare chairman John Lee at the event. yesterday
Pantai holds a long-term contract to provide services to public hospitals as well as the concession for foreign worker health checks.
However, Khazanah Nasional Bhd had been quoted to say that it was up to Faber or Pantai to deny the speculation.
It was reported that over the past couple of weeks, several reports have suggested that there could be a deal involving the two companies, which hold government concessions.
Khazanah through UEM Group have 34.3% stake in Faber while Pantai is wholly owned by Pantai Irama Ventures Sdn Bhd, which in turn is 60 % held by Khazanah, and 40% by Singapore’s Parkway Holdings Ltd.
He also said that although Pantai delivered quality service in both the concessions, the possibility of selling them in the near future were possible.
”If the price is good, then why not. However, until now no price proposal has been received by us,” he said.
He also said the company was planning to build one more hospital in Iskandar region, Johor Bahru within five years that include a nursing college.
“It may cost around RM500mil for that development and may be completed within five years or earlier than that,” he said.
Pantai Holdings have currently nine hospitals in Malaysia in addition to its international operations.
http://biz.thestar.com.my/news/story.asp?file=/2010/3/5/business/5799408&sec=business
By EDY SARIF
Chairman denies speculation of tie-up with Faber
edy@thestar.com.my
KUALA LUMPUR: Pantai Holdings Bhd has dismissed rumours of a possible merger between Faber Group Bhd healthcare management business, Faber Medi-Serve and Pantai Medivest Sdn Bhd, says chairman Tan Sri Mohamed Khatib Abdul Hamid.
“Both companies belong to the same parent company that is Khazanah Nasional Bhd. So why should we merge them both?” he said yesterday at a press conference after the launch of Preventive Healthcare and Collaboration Agreement between Pantai Holdings and Preventive Healthcare Sdn Bhd.
The collaboration would see Preventive Healthcare offering a comprehensive and unparallel range of checkups, medical specialist and dietician consultants along with electronic storage of all personal medical records for up to 15 years to Pantai hospitals.
Mohamed Khatib was commenting on news reports recently, quoting from sources that Pantai’s concession business might be sold.
From left: Tan Sri Mohamed Khatib Abdul Hamid, CEO of Malaysia Healthcare Travel Council, Health Ministry Datuk Ooi Say Chuan and Preventive Healthcare chairman John Lee at the event. yesterday
Pantai holds a long-term contract to provide services to public hospitals as well as the concession for foreign worker health checks.
However, Khazanah Nasional Bhd had been quoted to say that it was up to Faber or Pantai to deny the speculation.
It was reported that over the past couple of weeks, several reports have suggested that there could be a deal involving the two companies, which hold government concessions.
Khazanah through UEM Group have 34.3% stake in Faber while Pantai is wholly owned by Pantai Irama Ventures Sdn Bhd, which in turn is 60 % held by Khazanah, and 40% by Singapore’s Parkway Holdings Ltd.
He also said that although Pantai delivered quality service in both the concessions, the possibility of selling them in the near future were possible.
”If the price is good, then why not. However, until now no price proposal has been received by us,” he said.
He also said the company was planning to build one more hospital in Iskandar region, Johor Bahru within five years that include a nursing college.
“It may cost around RM500mil for that development and may be completed within five years or earlier than that,” he said.
Pantai Holdings have currently nine hospitals in Malaysia in addition to its international operations.
http://biz.thestar.com.my/news/story.asp?file=/2010/3/5/business/5799408&sec=business
Bank Negara unable to consider Affin bid for EON Cap
Published: Monday June 7, 2010 MYT 8:31:00 PM
PETALING JAYA: The much awaited counter-offer by Affin Holdings Bhd for EON Capital Bhd seems to have hit a snag as Bank Negara is not giving permission to the former to begin negotiations to buy the latter.
Affin said in an announcement to Bursa Malaysia late yesterday evening that the central bank was unable to consider its application to seek approval to commence negotiations with EON Capital and its major shareholders.
Affin had on May 4 submitted an application to Bank Negara for approval to commence negotiation with EON Capital.
No reasons were given by the central bank for its decision
http://biz.thestar.com.my/news/story.asp?file=/2010/6/7/business/20100607203657&sec=business
PETALING JAYA: The much awaited counter-offer by Affin Holdings Bhd for EON Capital Bhd seems to have hit a snag as Bank Negara is not giving permission to the former to begin negotiations to buy the latter.
Affin said in an announcement to Bursa Malaysia late yesterday evening that the central bank was unable to consider its application to seek approval to commence negotiations with EON Capital and its major shareholders.
Affin had on May 4 submitted an application to Bank Negara for approval to commence negotiation with EON Capital.
No reasons were given by the central bank for its decision
http://biz.thestar.com.my/news/story.asp?file=/2010/6/7/business/20100607203657&sec=business
Timing crucial in Affin’s bid to buy EON Cap
Thursday June 3, 2010
By YVONNE TAN
yvonne@thestar.com.my
PETALING JAYA: It remains unclear how much longer Bank Negara will take to decide whether to allow Affin Holdings Bhd to go ahead with its plan to acquire EON Capital Bhd (EON Cap).
The timing of the central bank’s decision is crucial in light of the existing RM5.06bil cash offer by Hong Leong Bank Bhd (HLB), which will soon be despatched to EON Cap shareholders.
When contacted, the central bank said it does not comment on specific issues relating to individual financial institutions.
After much speculation, Affin finally said on Monday that it had submitted a proposal to begin talks for the proposed buyout of EON Cap.
Affin, in its note to Bursa Malaysia, said it had submitted the application to the central bank on May 4, almost a month ago.
In contrast, it is understood that Bank Negara took two days to grant HLB the green light to commence negotiations with certain shareholders of EON Cap and about three weeks to start talks with the board of EON Cap.
A party familiar with the workings of the central bank, however, noted that all proposals had different levels of complexities and cannot be assessed using the same methods and time-frame.
The application to Bank Negara for approval is required pursuant to the Banking and Financial Institutions Act 1989.
Analysts noted that while Affin, being the second smallest banking group in the country, might not have sufficient financial muscle to undertake the deal on its own, it had shareholders with deep pockets, such as Lembaga Angkatan Tentera, which holds 32% stake in the bank, and Hong Kong’s Bank of East Asia, which owns 22%.
Both are said to be ready to back a rights issue by Affin to raise funds for the deal, should the acquisition go as planned.
Meanwhile, what is quite certain is HLB’s offer will be tabled to EON Cap shareholders at an EGM, which most expect to take place at the earliest by the end of next month.
At the market close yesterday, shares in Affin were down 1 sen to RM2.91 while HLB lost 4 sen to RM8.36. EON Cap shares finished flat at RM7.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/3/business/6390862&sec=business
By YVONNE TAN
yvonne@thestar.com.my
PETALING JAYA: It remains unclear how much longer Bank Negara will take to decide whether to allow Affin Holdings Bhd to go ahead with its plan to acquire EON Capital Bhd (EON Cap).
The timing of the central bank’s decision is crucial in light of the existing RM5.06bil cash offer by Hong Leong Bank Bhd (HLB), which will soon be despatched to EON Cap shareholders.
When contacted, the central bank said it does not comment on specific issues relating to individual financial institutions.
After much speculation, Affin finally said on Monday that it had submitted a proposal to begin talks for the proposed buyout of EON Cap.
Affin, in its note to Bursa Malaysia, said it had submitted the application to the central bank on May 4, almost a month ago.
In contrast, it is understood that Bank Negara took two days to grant HLB the green light to commence negotiations with certain shareholders of EON Cap and about three weeks to start talks with the board of EON Cap.
A party familiar with the workings of the central bank, however, noted that all proposals had different levels of complexities and cannot be assessed using the same methods and time-frame.
The application to Bank Negara for approval is required pursuant to the Banking and Financial Institutions Act 1989.
Analysts noted that while Affin, being the second smallest banking group in the country, might not have sufficient financial muscle to undertake the deal on its own, it had shareholders with deep pockets, such as Lembaga Angkatan Tentera, which holds 32% stake in the bank, and Hong Kong’s Bank of East Asia, which owns 22%.
Both are said to be ready to back a rights issue by Affin to raise funds for the deal, should the acquisition go as planned.
Meanwhile, what is quite certain is HLB’s offer will be tabled to EON Cap shareholders at an EGM, which most expect to take place at the earliest by the end of next month.
At the market close yesterday, shares in Affin were down 1 sen to RM2.91 while HLB lost 4 sen to RM8.36. EON Cap shares finished flat at RM7.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/3/business/6390862&sec=business
Thursday, June 3, 2010
Timing crucial in Affin’s bid to buy EON Cap
Thursday June 3, 2010
By YVONNE TAN
yvonne@thestar.com.my
PETALING JAYA: It remains unclear how much longer Bank Negara will take to decide whether to allow Affin Holdings Bhd to go ahead with its plan to acquire EON Capital Bhd (EON Cap).
The timing of the central bank’s decision is crucial in light of the existing RM5.06bil cash offer by Hong Leong Bank Bhd (HLB), which will soon be despatched to EON Cap shareholders.
When contacted, the central bank said it does not comment on specific issues relating to individual financial institutions.
After much speculation, Affin finally said on Monday that it had submitted a proposal to begin talks for the proposed buyout of EON Cap.
Affin, in its note to Bursa Malaysia, said it had submitted the application to the central bank on May 4, almost a month ago.
In contrast, it is understood that Bank Negara took two days to grant HLB the green light to commence negotiations with certain shareholders of EON Cap and about three weeks to start talks with the board of EON Cap.
A party familiar with the workings of the central bank, however, noted that all proposals had different levels of complexities and cannot be assessed using the same methods and time-frame.
The application to Bank Negara for approval is required pursuant to the Banking and Financial Institutions Act 1989.
Analysts noted that while Affin, being the second smallest banking group in the country, might not have sufficient financial muscle to undertake the deal on its own, it had shareholders with deep pockets, such as Lembaga Angkatan Tentera, which holds 32% stake in the bank, and Hong Kong’s Bank of East Asia, which owns 22%.
Both are said to be ready to back a rights issue by Affin to raise funds for the deal, should the acquisition go as planned.
Meanwhile, what is quite certain is HLB’s offer will be tabled to EON Cap shareholders at an EGM, which most expect to take place at the earliest by the end of next month.
At the market close yesterday, shares in Affin were down 1 sen to RM2.91 while HLB lost 4 sen to RM8.36. EON Cap shares finished flat at RM7.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/3/business/6390862&sec=business
By YVONNE TAN
yvonne@thestar.com.my
PETALING JAYA: It remains unclear how much longer Bank Negara will take to decide whether to allow Affin Holdings Bhd to go ahead with its plan to acquire EON Capital Bhd (EON Cap).
The timing of the central bank’s decision is crucial in light of the existing RM5.06bil cash offer by Hong Leong Bank Bhd (HLB), which will soon be despatched to EON Cap shareholders.
When contacted, the central bank said it does not comment on specific issues relating to individual financial institutions.
After much speculation, Affin finally said on Monday that it had submitted a proposal to begin talks for the proposed buyout of EON Cap.
Affin, in its note to Bursa Malaysia, said it had submitted the application to the central bank on May 4, almost a month ago.
In contrast, it is understood that Bank Negara took two days to grant HLB the green light to commence negotiations with certain shareholders of EON Cap and about three weeks to start talks with the board of EON Cap.
A party familiar with the workings of the central bank, however, noted that all proposals had different levels of complexities and cannot be assessed using the same methods and time-frame.
The application to Bank Negara for approval is required pursuant to the Banking and Financial Institutions Act 1989.
Analysts noted that while Affin, being the second smallest banking group in the country, might not have sufficient financial muscle to undertake the deal on its own, it had shareholders with deep pockets, such as Lembaga Angkatan Tentera, which holds 32% stake in the bank, and Hong Kong’s Bank of East Asia, which owns 22%.
Both are said to be ready to back a rights issue by Affin to raise funds for the deal, should the acquisition go as planned.
Meanwhile, what is quite certain is HLB’s offer will be tabled to EON Cap shareholders at an EGM, which most expect to take place at the earliest by the end of next month.
At the market close yesterday, shares in Affin were down 1 sen to RM2.91 while HLB lost 4 sen to RM8.36. EON Cap shares finished flat at RM7.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/3/business/6390862&sec=business
Potential synergies in Affin-EON Cap merger
Friday June 4, 2010
By ELAINE ANG
elaine@thestar.com.my
Combined entity will have strong niche in SME and hire purchase segments
PETALING JAYA: The possible merger between Affin Holdings Bhd and EON Capital Bhd (EON Cap) could create a combined banking group with a strong niche in the small and medium enterprise (SME) and hire purchase banking segments.
“Affin’s strength is in SME loans while EON Cap’s focus is in the consumer hire purchase segment. The merger will enable the combined group to excel in niche areas such as the SME and hire purchase businesses. These areas have much potential for growth,” a source familiar with banking operations said.
The combined banking group will be in third position in terms of SME and hire purchase lending versus other listed peers with loans worth RM12.2bil and RM14.6bil respectively. The possible merger would also enable the group to develop new areas of business in bancassurance, corporate and investment banking, treasury and priority banking, the source said.
The possible merger of Affin, the eighth largest banking group in the country, with the seventh largest EON Cap, would result in the sixth largest bank by assets with combined assets totalling some RM83bil. It would also create a banking group with the fourth largest branch network in the country with 230 branches nationwide.
Analysts said Affin’s subsidiaries, including its life and general insurance and asset management businesses would have access to a bigger customer base of about 1.7 million customers and a wider reach through a larger combined branch network.
Analysts also see cost synergies to be derived from the possible merger, driven by improvement in deposit/funding mix and cheaper access to long-term deposit and capital market funding.
Citing an example, an analyst said the possible merger could result in operational efficiencies and drive branch administration and staff costs down by some 24.5% and 8.5% respectively.
It had been pointed out that Affin might not have sufficient financial muscle to undertake the deal on its own. However, Affin managing director Tan Sri Lodin Wok Kamaruddin was quoted in a news report that the banking group had the financial means to make a takeover bid for EON Cap.
This could be linked to the fact that Affin has shareholders with deep pockets, such as Lembaga Angkatan Tentera, which holds a 32% stake in the bank, and Hong Kong’s Bank of East Asia, which owns 22%.
It is believed that Affin’s key shareholders have already expressed their support for the transaction and would make substantial equity commitment, such as backing a rights issue to ensure proper capitalisation going forward.
Affin has sought the green light from Bank Negara to make a general offer for EON Cap. It was reported that Affin is offering between RM7.40 and RM7.60 per share and that it planned to fund the acquisition through a rights issue.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/4/business/6397131&sec=business
By ELAINE ANG
elaine@thestar.com.my
Combined entity will have strong niche in SME and hire purchase segments
PETALING JAYA: The possible merger between Affin Holdings Bhd and EON Capital Bhd (EON Cap) could create a combined banking group with a strong niche in the small and medium enterprise (SME) and hire purchase banking segments.
“Affin’s strength is in SME loans while EON Cap’s focus is in the consumer hire purchase segment. The merger will enable the combined group to excel in niche areas such as the SME and hire purchase businesses. These areas have much potential for growth,” a source familiar with banking operations said.
The combined banking group will be in third position in terms of SME and hire purchase lending versus other listed peers with loans worth RM12.2bil and RM14.6bil respectively. The possible merger would also enable the group to develop new areas of business in bancassurance, corporate and investment banking, treasury and priority banking, the source said.
The possible merger of Affin, the eighth largest banking group in the country, with the seventh largest EON Cap, would result in the sixth largest bank by assets with combined assets totalling some RM83bil. It would also create a banking group with the fourth largest branch network in the country with 230 branches nationwide.
Analysts said Affin’s subsidiaries, including its life and general insurance and asset management businesses would have access to a bigger customer base of about 1.7 million customers and a wider reach through a larger combined branch network.
Analysts also see cost synergies to be derived from the possible merger, driven by improvement in deposit/funding mix and cheaper access to long-term deposit and capital market funding.
Citing an example, an analyst said the possible merger could result in operational efficiencies and drive branch administration and staff costs down by some 24.5% and 8.5% respectively.
It had been pointed out that Affin might not have sufficient financial muscle to undertake the deal on its own. However, Affin managing director Tan Sri Lodin Wok Kamaruddin was quoted in a news report that the banking group had the financial means to make a takeover bid for EON Cap.
This could be linked to the fact that Affin has shareholders with deep pockets, such as Lembaga Angkatan Tentera, which holds a 32% stake in the bank, and Hong Kong’s Bank of East Asia, which owns 22%.
It is believed that Affin’s key shareholders have already expressed their support for the transaction and would make substantial equity commitment, such as backing a rights issue to ensure proper capitalisation going forward.
Affin has sought the green light from Bank Negara to make a general offer for EON Cap. It was reported that Affin is offering between RM7.40 and RM7.60 per share and that it planned to fund the acquisition through a rights issue.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/4/business/6397131&sec=business
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