Friday August 17, 2012
Affin, Bank Muamalat start M&A talks
KUALA LUMPUR: Affin Holdings Bhd has received the green light from Bank Negara to commence negotiations with DRB-Hicom Bhd and Khazanah Nasional Bhd for a possible acquisition of equity interests in Bank Muamalat Malaysia Bhd.
Affin said in an announcement to Bursa that the negotiations were to be completed on or before Dec 31.
The potential disposal of interest in Bank Muamalat is in line with Bank Negara’s requirement – that following the completion of the acquisition of 70% equity interest in Bank Muamalat by DRB-Hicom on Oct 22, 2008; DRB-Hicom is required to reduce its equity interest in Bank Muamalat to 40%, DRB said in a separate statement.
“Affin Holdings and the DRB would be required to obtain the prior approval of the Finance Ministry – with Bank Negara’s recommendation, pursuant to the Islamic Banking Act 1983 – before entering into any agreement to effect the above disposal,” it added.
Should these negotiations eventually lead to a merger and/or acquisition (M&A) it will create a larger bank that will be able to more effectively compete against the bigger banking boys in a more or less saturated market locally today.
Affin’s financial year 2011 statements show that it had net assets per share of 37.4 sen, earnings per share of 34.0 sen, gross dividend per share of 12.0 sen and total assets amounting to RM53.7bil.
Its major shareholders are Lembaga Tabung Angkatan Tentera (35.2%), The Bank Of East Asia Ltd (23.5%) and Boustead Holdings Bhd (20.7%). The Employees Provident Fund also owns close to 7% in the group, while it also counts several foreigners such as The Bank Of New York Mellon and JPMorgan Chase Bank as its shareholders, according to its latest annual report.
Affin had been listed on the Bursa Malaysia back in 1991 while Bank Muamalat is a 70% owned subsidiary of DRB-Hicom.