Maybank completes BII deal after discount

The Jakarta Post   |  Thu, 10/02/2008 3:26 AM  |  Business

The Malayan Banking Bhd (Maybank) has completed the transaction over majority ownership in Bank Internasional Indonesia (BII) after agreeing to a discount offer from the Sorak consortium.

Maybank acquired 55.6 percent shares in BII on Tuesday for US$ 1.24 billion after consortium members, Singapore’s Temasek Holdings and South Korea’s Kookmin Bank, bowed down to the demand of Malaysia’s central bank of lowering the selling price.

In a statement sent to the Malaysia’s stock exchange on Wednesday, Maybak said that the consortium offered a discount worth $220.5 million, making the price per share significantly lower to Rp 433 (4.6 US cents) per share from Rp 510 that was agreed earlier.

Maybank president and CEO Abdul Wahid Omar said in the statement: "It has been an intensive process to bring this transaction to a close but we are happy that we have all now come to agreement.

"This acquisition expands our presence in Indonesia which we have always recognized as a key market for us."

Earlier in March, Maybank said it would buy the 55.6 percent stake in BII for $1.5 billion and would offer another $1.2 billion for the rest of the company, valuing the deal at a total $2.7 billion.

Shortly after, the Malaysian central bank intervened by blocking the deal, arguing that the price was too high amid currently volatile condition of the global financial market as a result of liquidity crisis in the U.S..

Refusing to lowering the price in the interest of minority shareholders, Temasek and Kookmin offered a sweetener in a form of transaction rebate. Temasek offered a rebate worth $164.8 million while no amount had been disclosed from Kookmin.

Despite the rebate, Maybank did not follow through with the acquisition and violated a transaction deadline set on Friday last week. (and)

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