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Maybank’s BII deal in doubt despite lower offer

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September 27, 2008

Maybank’s BII deal in doubt despite lower offer
Fullerton Financial Holdings, part of Singapore's Temasek, said on Saturday it offered an improved deal for the sale of its stake in Bank Internasional Indonesia but Malaysia's Maybank did not accept it, another blow to a troubled deal, Reuters reported.

Fullerton said it offered late on Friday to close the sale of its majority stake in BII with a rebate of S$236.4 million ($165.9 million) after Malaysia's central bank told state-owned Maybank to cut the price of its $2.7 billion bid for BII.

"However, despite the offer of a rebate, Maybank did not accept the offer," Fullerton said in a statement, adding that it was aware fellow majority stakeholder South Korea's Kookmin Bank also made an offer, without giving details.

"In light of these events, Fullerton will exercise all its rights under the SSA (Share Sale Agreement) and will explore with Kookmin the various options with regard to their respective stakes."

The Malaysian central bank move, prompted by the global financial crisis that has slashed asset values, is likely to be welcomed by many investors who reckoned Maybank was paying too much. But it could also dent the image of the central bank, which has repeatedly meddled in the deal.

Shares in BII slumped by more than a third on Friday following a trade suspension, while Maybank, Malaysia's top lender, fell 0.7 percent.

Maybank had been due to complete its purchase on Friday of a 55.5 percent stake in BII, for $1.5 billion, or 510 rupiah per share, and make a tender offer for the rest, giving a total price tag of $2.7 billion.

That would be a 23 percent premium to when the deal was announced earlier this year, but that premium almost trebled after BII's share price fell sharply on Friday.

Maybank rattled investors when it unveiled the deal in March. The lender had previously been criticised by investors for being too slow to expand outside its home market as other investors snapped up assets in Asia's fast-growing economies.

In response to Malaysian central bank ruling on Maybank’s planned acquisition of BII, Indonesia's capital market watchdog, Bapepam, said on Friday that the decision was "not too wise".

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