MAYBANK, Malaysia’s largest lender by assets, is snapping up Singapore broker Kim Eng Holdings for $1.4bn (£893m), in a move to strengthen its grip on the regional stockbroking industry and diversify the lender’s source of overseas revenue.
Maybank will pay 3.10 Singaporean dollars per share for a 44.6 per cent stake in the broker, before launching a mandatory offer for its entire operations on completion. The banking group has said it plans to privatise Kim Eng, which the acquisition has priced at 1.91 times its book value at the end of September 2010.
Maybank chairman Tan Sri Megat Zaharuddin Megat Mohd Nor said that the transaction was “a great leap forward” for the group, with Kim Eng offering an “immediate platform to aggressively build up our global wholesale banking capabilities in Asean and beyond”.
Maybank, which was previously linked with another regional brokerage OSK Holdings, said it has no plans for further acquisitions in this business.
Maybank’s shares gained 2.74 per cent during trading yesterday, closing at 6.00 Malaysian ringits (MYR) on Bursa Malaysia, while Kim Eng closed 2.66 per cent up at 2.77 ringits.
Shares in Thailand’s Kim Eng Securities surged as much as 11.9 per cent on news of the planned acquisition of its Singapore parent.
The acquisition comes as Southeast Asian markets are on a roll, with Thailand and Indonesia ranking as the best performing major markets in Asia last year.
City A.M. Reporter