RHB Capital, OSK get Bank Negara nod to start merger talks

KUALA LUMPUR: RHB CAPITAL BHD [] and OSK HOLDINGS BHD [] have received Bank Negara Malaysia's approval to commence negotiations for a possible merger.

In separate filings to Bursa Malaysia Securities on Friday, Oct 14, RHB Capital and OSK said they had received Bank Negara's approval in principle via letters dated Oct 13 that the central bank had no objection for the parties to commence negotiations for a possible merger of businesses between the RHB banking group and OSK investment banking group.

OSK said the approval to commence negotiations was valid for a period of 3 months from the date of Bank Negara's letter.

'Further details on the possible merger will be announced in due course,' it said.

OSK Holdings at highest since April on merger plan

KUALA LUMPUR: Shares of OSK HOLDINGS BHD [] climbed to the highest since April 26 this year, hitting an intra morning high of RM1.77 after it announced plans for a merger with RHB CAPITAL BHD [].

At 10.10am, OSK was up 25 sen to RM1.64 with 10.81 million shares done. RHB Capital rose nine sen to RM7.25 with 968,900 shares done.

The FBM KLCI surged 14.74 points to 1,402.20. Turnover was 314.36 million shares valued at RM301 million. Gainers led losers 367 to 96 while 155 counters were unchanged.

MIDF Research maintained its buy call on RHB Capital with a target price of RM9.35. It said the valuation remained undemanding at PER of 12.3 times to its PS forecast of 76 sen and PBV of 1.62 times to its projected book value for FY12.

'We retain our BUY recommendation on the stock. As it is merger talk is still in preliminary stages with not much details available, we make no adjustments to our forecast at this juncture,' it said.

OSK Investment Bank resigns as Kinsteel independent adviser

KUALA LUMPUR: OSK Investment Bank Bhd has resigned as an independent adviser to KINSTEEL BHD []'s corporate exercise, which includes a proposed restricted offer for sale.

According to a statement on Friday, Sept 23, OSK Investment Bank had resigned with effect from Thursday, citing that new developments had arisen which it believed would affect its independence to act as the independent adviser.

TA Securities Holdings Bhd was appointed as the new independent adviser to replace OSK Investment Bank.

The corporate exercise involved a proposed subscription of RM280 million nominal value of seven-year 7% redeemable convertible unsecured loan stocks issued by its subsidiary, Perwaja Holdings Bhd at 100% of its nominal value.

Kinsteel had proposed a renounceable restricted offer for sale of such nominal value of the RCULS held by it to the entitled shareholders of Perwaja, other than Kinsteel, on the basis of RM1 nominal value of RCULS for every two existing shares of RM1 each in Perwaja.