KUALA LUMPUR: OSK Research said both CIMB and Maybank have officially announced that they have decided not to pursue the potential merger opportunity with RHB CAPITAL BHD [].
It said on Friday, June 24 this piece of news did not entirely come as a surprise given the fact that the proposed merger with RHB Capital was rumored to have been at the invitation of Bank Negara rather than being initiated by CIMB or Maybank.
'As such pricing and rationale for a synergistic merger were key stumbling blocks from the start.
'We have been highlighting in our previous notes that both banking groups would exercise some form of pricing discipline/caution given the apparent lack of revenue synergies, especially in CIMB's case,' it said.
OSK Research said Abu Dahbi Commercial Bank's relatively expensive sale pricing of its 24.9% stake in RHB Capital to Aabar Investment could have been the deal breaker for Maybank, while in CIMB's case there were no meaningful synergies from the very beginning.
'We are retaining our BUY call for RHB Capital (FV of RM10.16), Maybank: FV:RM10.07 (2.32x FY11 PBV, 15.4% ROE) and CIMB (BUY, FV:RM9.15),' it said.
It said on Friday, June 24 this piece of news did not entirely come as a surprise given the fact that the proposed merger with RHB Capital was rumored to have been at the invitation of Bank Negara rather than being initiated by CIMB or Maybank.
'As such pricing and rationale for a synergistic merger were key stumbling blocks from the start.
'We have been highlighting in our previous notes that both banking groups would exercise some form of pricing discipline/caution given the apparent lack of revenue synergies, especially in CIMB's case,' it said.
OSK Research said Abu Dahbi Commercial Bank's relatively expensive sale pricing of its 24.9% stake in RHB Capital to Aabar Investment could have been the deal breaker for Maybank, while in CIMB's case there were no meaningful synergies from the very beginning.
'We are retaining our BUY call for RHB Capital (FV of RM10.16), Maybank: FV:RM10.07 (2.32x FY11 PBV, 15.4% ROE) and CIMB (BUY, FV:RM9.15),' it said.
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