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July 27, 2008

Indonesia: BII must stay public after tender offer
Indonesia’s sixth-largest lender, PT Bank Internasional Indonesia Tbk, must remain public after a planned tender offer by Malaysian Banking Bhd (Maybank), Reuters quoted Capital Market Supervisory Agency, known as Bapepam, the capital market watchdog, as saying Friday.

Malaysia's Maybank, which recently bid $2.7 billion for a 55.5 percent stake in BII from Singapore state investor Temasek Holdings and South Korea's Kookmin Bank , has said it plans to spend an additional $1.2 billion to buy the rest of the shares.

The watchdog has raised the threshold for tender offers in takeovers to 50 percent from 25 percent and requires a buyer to sell some shares to ensure that the target company will have a 20 percent free float within two years after the tender offer.

Previously, there was no requirement to maintain a certain free float of a listed company after a tender offer.

"They met us yesterday (July 23) for clarification and asked which ruling will be applicable to them and I said it was the new ruling and there will be no exemption," Fuad Rahmany, the chairman of Indonesia's Capital Market Supervisory Agency, known as Bapepam, told reporters.

"Even if they secure a 100 percent BII stake from the tender offer they have to refloat them (the shares)," he said, adding that Maybank could not take BII private before the process had been completed.

Maybank's bid represented a 23 percent premium on BII's share at that time, considered to be the highest premium ever paid by a foreign buyer for an Indonesian bank.

Indonesia's central bank has approved Maybank's acquisition of BII. BII's shares traded 2.1 percent lower at 470 rupiah each late on Friday, while the broader index slipped 1 percent.

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