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Maybank asked to lower bid price for Indonesia’s BII

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September 29, 2008

Maybank asked to lower bid price for Indonesia’s BII

Trading in Malaysia’s Maybank stock has been suspended from 0100 GMT (9:00 am) on Monday pending an announcement by the company, Reuters quoted Bursa Malaysia, the country’s stock exchange, as saying.

Malaysia's central bank told state-owned Maybank to lower the price of its $2.7 billion bid for BII last week, which pulled BII shares down more than a third on Friday.

But Fullerton Financial Holdings, part of Singapore's Temasek, said on Saturday it offered an improved deal for the sale of its stake in Indonesia’s Bank Internasional Indonesia (BII), but Maybank did not accept it.

Meanwhile, Korea’s Kookmin Bank on Monday cut the value of its planned sale of shares in BII to reflect a revision to Maybank's bid for the Indonesian lender.

The announcement followed Malaysia's central bank order for Maybank to lower its bid price for BII.

Singapore's state investor Temasek controls 42 percent of BII, and South Korea's Kookmin owns 14 percent.

Both hold the shares via Sorak Financial Holdings, with Kookmin under a 'tag along' agreement with Temasek if the Singapore firm sells BII shares.

"The sale value was based on a revised price between Fullerton Financial Holdings (FFH) and Malayan Banking Berhad (Maybank), reflecting global financial market conditions of late," Kookmin told the Korea Exchange in a disclosure.

Kookmin, in which share trade has been suspended until Oct. 10 due to a holding company launch, revised the sale value of its BII shares to 361.8 billion won ($311.8 million) from the previously stated 375 billion won.

That represented 2,053,426.84748 rupiah per share compared with the original 2,436,611.39.

The South Korean bank said the sale date had yet to be determined, correcting a March disclosure under which it said the sale would be completed within the third quarter of 2008.

"It has not been finalised whether to exercise the tag along option or not, depending on the deal completion between FFH and Maybank."

With the prospective stake sale, Kookmin stands to gain four-fold on its initial investment in BII, although the transaction may signal its retreat from Indonesia. It spent about 83.5 billion won on the stake in the Indonesian bank.

The deal, announced in March, priced BII at about 4.6 times book value, compared to Maybank's 2.3 and leading Indonesian lender Bank Mandiri's 1.98 times.

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