23% premium sounds logical for BII
It seems like banks have had enough of playing ‘cheerleaders’ in the M&As game. And if you thought the ABN Amro deal was all there was, Malaysian Banking Bhd (Maybank) is here to prove you wrong with its 55.7% stake-buy in Bank International Indonesia (BII) – a $1.5 billion deal announced on March 26, 2008. Also, with Maybank making a further open offer to other minority shareholders for the remaining 44.3% stake, the overall deal is expected to create a $2.7 billion dent in Maybank’s pocket.
Dato Desa, CEO, Maybank, justifies the deal as, “The strategic and financial rationale for the acquisition is extremely compelling. The acquisition will transform our growth prospects in Indonesia...” Surely, this is a huge step forward in Maybank’s strategy to regionalise its operations through investments in high-growth markets. The logic for the deal, too, sounds valid with margins in Malaysia drying-up fast due to competition intensifying by the day. However, Maybank’s stakeholders appeared critical as its share prices fell to a 3.5-year low post-announcement to 8.40 Ringgit.
It seems like banks have had enough of playing ‘cheerleaders’ in the M&As game. And if you thought the ABN Amro deal was all there was, Malaysian Banking Bhd (Maybank) is here to prove you wrong with its 55.7% stake-buy in Bank International Indonesia (BII) – a $1.5 billion deal announced on March 26, 2008. Also, with Maybank making a further open offer to other minority shareholders for the remaining 44.3% stake, the overall deal is expected to create a $2.7 billion dent in Maybank’s pocket.
Dato Desa, CEO, Maybank, justifies the deal as, “The strategic and financial rationale for the acquisition is extremely compelling. The acquisition will transform our growth prospects in Indonesia...” Surely, this is a huge step forward in Maybank’s strategy to regionalise its operations through investments in high-growth markets. The logic for the deal, too, sounds valid with margins in Malaysia drying-up fast due to competition intensifying by the day. However, Maybank’s stakeholders appeared critical as its share prices fell to a 3.5-year low post-announcement to 8.40 Ringgit.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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