RHB Capital Bhd, Malaysia’s fifth-biggest banking group, may issue stock to pay for OSK Holdings Bhd’s investment bank, three people with knowledge of the matter said.
RHB may issue new shares equivalent to as much as 10 percent of its existing equity to pay for the unit, said the people, who declined to be identified as talks are private. That would value the transaction at up to RM1.63 billion (US$514 million), based on RHB’s market capitalization.
Buying OSK Investment Bank Bhd would allow RHB to overtake CIMB Investment Bank Bhd as the biggest stockbroker in Malaysia, based on data from the country’s exchange. RHB Chief Executive Officer Kellee Kam Chee Khiong last week told local newspaper The Star that he expects to complete the deal by mid-December.
The Kuala Lumpur-based companies said in October they received central bank approval to begin negotiations to combine their investment banking businesses. The approval is valid for three months, they said at the time.
RHB in June broke off separate merger talks with Malayan Banking Bhd and CIMB Group Holdings Bhd, the country’s two largest banks, and said it would focus on expanding on its own. Talks with the two rivals collapsed after Abu Dhabi’s Aabar Investments PJSC bought a stake in RHB at an above-market price, pushing up the price of a takeover. Shares in RHB have dropped 25 percent since June 1.
Mahanum Shariff, head of group corporate communications at OSK Holdings, declined to comment on the transaction. Kam was at a meeting and not immediately available, his secretary said. -- Bloomberg
RHB may issue new shares equivalent to as much as 10 percent of its existing equity to pay for the unit, said the people, who declined to be identified as talks are private. That would value the transaction at up to RM1.63 billion (US$514 million), based on RHB’s market capitalization.
Buying OSK Investment Bank Bhd would allow RHB to overtake CIMB Investment Bank Bhd as the biggest stockbroker in Malaysia, based on data from the country’s exchange. RHB Chief Executive Officer Kellee Kam Chee Khiong last week told local newspaper The Star that he expects to complete the deal by mid-December.
The Kuala Lumpur-based companies said in October they received central bank approval to begin negotiations to combine their investment banking businesses. The approval is valid for three months, they said at the time.
RHB in June broke off separate merger talks with Malayan Banking Bhd and CIMB Group Holdings Bhd, the country’s two largest banks, and said it would focus on expanding on its own. Talks with the two rivals collapsed after Abu Dhabi’s Aabar Investments PJSC bought a stake in RHB at an above-market price, pushing up the price of a takeover. Shares in RHB have dropped 25 percent since June 1.
Mahanum Shariff, head of group corporate communications at OSK Holdings, declined to comment on the transaction. Kam was at a meeting and not immediately available, his secretary said. -- Bloomberg
