KUALA LUMPUR: Shares of RHB CAPITAL BHD [], MALAYAN BANKING BHD [] and CIMB Group Bhd slipped in morning trade in line with weaker regional markets on Monday, June 12.
Sentiment was further weighed down by news that Abu Dhabi Commercial Bank''(ADCB) plans to sell its 25% RHB Cap stake to Abu Dhabi investment fund Aabar and has won Bank Negara Malaysia's approval to start talks.
At 11.58am, RHB Cap was down three sen to 87 sen with 349.800 shares done, Maybank shed seven sen to RM8.71 with 1.86 million units done. CIMB eased two sen to RM8.39 with 3,32 million shares transacted.
Maybank and CIMB had stated their interest in ADCB's stake in RHB Cap.
Reuters reported on Sunday the Abu Dhabi lender, whose stake in RHB Cap was valued at around $1.6 billion, had held a first round auction to sell the stake, drawing wide interest.
But proposed takeover bids for RHB itself from Malaysian rivals Maybank (MBBM.KL) and CIMB (CIMB.KL) put a spanner into the works.
"In connection with the bank's strategic review of its stake in RHB Capital ... the bank received approval from Bank Negra (the Malaysian central bank) to enter into negotiations with Aabar Investments regarding a potential sale transaction," ADCB said in a bourse statement on Sunday.
A sale to Aabar, which had expressed early interest in the RHB stake, allows ADCB to quickly generate funds rather than wait for the Malaysian takeover saga to play out, people familiar with the matter said.
Abu Dhabi owns 55% of ADCB.
"Abu Dhabi somehow wants to retain a stake in RHB and it makes sense for Aabar to buy it and broaden its banking investment portfolio," said an Abu Dhabi source familiar with the matter told Reuters. "From ADCB's viewpoint, it needs cash and its strategy is to be a local player rather than overseas."
Aabar, majority-owned by Abu Dhabi government investment vehicle International Petroleum Investment Corp (IPIC), last year bought a 4.99-percent stake in Italy's Unicredit CRDI.MV.
Its chief executive said at the time that the fund "always had a strategy to invest in financial services.
Aabar was not immediately available for comment on Sunday.
The fund is also the biggest shareholder in automaker Daimler (DAIGn.DE) and signed on as cornerstone investor in Glencore's recent IPO.
"Aabar is seen to be a preferred bidder as it makes sense for an internal Abu Dhabi solution," said a separate source familiar with the matter. "The transfer to another Abu Dhabi entity may be easier right now."
ADCB had hired Goldman Sachs (GS.N) and BofA-Merrill Lynch as advisors on the transaction to sell its position in Malaysia's fifth-largest bank with a $7.3 billion market value.
An earlier ADCB auction of the stake had drawn interest from Japan's Sumitomo Mitsui Financial Group (SMFG) (8316.T) and Carlyle CYL.UL, sources said.
ADCB declined to comment on whether it planned to sell the stake directly to Aabar or the fund was taking part in another round of bidding.
"Pricing is key here and it would be interesting to see how much Aabar is willing to pay," said an Abu Dhabi banker, speaking on condition of anonymity.
Shares in ADCB closed down 0.96 percent on the Abu Dhabi bourse on Sunday.
Sentiment was further weighed down by news that Abu Dhabi Commercial Bank''(ADCB) plans to sell its 25% RHB Cap stake to Abu Dhabi investment fund Aabar and has won Bank Negara Malaysia's approval to start talks.
At 11.58am, RHB Cap was down three sen to 87 sen with 349.800 shares done, Maybank shed seven sen to RM8.71 with 1.86 million units done. CIMB eased two sen to RM8.39 with 3,32 million shares transacted.
Maybank and CIMB had stated their interest in ADCB's stake in RHB Cap.
Reuters reported on Sunday the Abu Dhabi lender, whose stake in RHB Cap was valued at around $1.6 billion, had held a first round auction to sell the stake, drawing wide interest.
But proposed takeover bids for RHB itself from Malaysian rivals Maybank (MBBM.KL) and CIMB (CIMB.KL) put a spanner into the works.
"In connection with the bank's strategic review of its stake in RHB Capital ... the bank received approval from Bank Negra (the Malaysian central bank) to enter into negotiations with Aabar Investments regarding a potential sale transaction," ADCB said in a bourse statement on Sunday.
A sale to Aabar, which had expressed early interest in the RHB stake, allows ADCB to quickly generate funds rather than wait for the Malaysian takeover saga to play out, people familiar with the matter said.
Abu Dhabi owns 55% of ADCB.
"Abu Dhabi somehow wants to retain a stake in RHB and it makes sense for Aabar to buy it and broaden its banking investment portfolio," said an Abu Dhabi source familiar with the matter told Reuters. "From ADCB's viewpoint, it needs cash and its strategy is to be a local player rather than overseas."
Aabar, majority-owned by Abu Dhabi government investment vehicle International Petroleum Investment Corp (IPIC), last year bought a 4.99-percent stake in Italy's Unicredit CRDI.MV.
Its chief executive said at the time that the fund "always had a strategy to invest in financial services.
Aabar was not immediately available for comment on Sunday.
The fund is also the biggest shareholder in automaker Daimler (DAIGn.DE) and signed on as cornerstone investor in Glencore's recent IPO.
"Aabar is seen to be a preferred bidder as it makes sense for an internal Abu Dhabi solution," said a separate source familiar with the matter. "The transfer to another Abu Dhabi entity may be easier right now."
ADCB had hired Goldman Sachs (GS.N) and BofA-Merrill Lynch as advisors on the transaction to sell its position in Malaysia's fifth-largest bank with a $7.3 billion market value.
An earlier ADCB auction of the stake had drawn interest from Japan's Sumitomo Mitsui Financial Group (SMFG) (8316.T) and Carlyle CYL.UL, sources said.
ADCB declined to comment on whether it planned to sell the stake directly to Aabar or the fund was taking part in another round of bidding.
"Pricing is key here and it would be interesting to see how much Aabar is willing to pay," said an Abu Dhabi banker, speaking on condition of anonymity.
Shares in ADCB closed down 0.96 percent on the Abu Dhabi bourse on Sunday.
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