K&N Kenanga Holdings Bhd, a Malaysian brokerage, is in talks to buy the investment banking and broking operations of local rival ECM Libra Financial Group Bhd, two people familiar with the matter said.
ECM Libra, which has a market capitalization of RM669 million (US$213 million), would retain only its asset management business after the sale, one person said, declining to be identified as talks are private. That unit accounted for about 3 percent of ECM Libra’s revenue in the quarter ending July 31.
The sale would help Azman Hashim, ECM Libra’s biggest shareholder, meet Malaysian central bank licensing rules that bar a single individual from being a key owner of more than one investment bank. Azman, who owns 24 per cent of ECM Libra, also indirectly holds almost 17 per cent of AMMB Holdings Bhd, Malaysia’s fifth-biggest lender by market value, according to data compiled by Bloomberg.
Kenanga is Malaysia’s eighth-biggest equities broker by trading volume, while ECM Libra is No. 10, according the stock exchange’s website. Kenanga spokesman Siti Maslinda Sheikh Othman wasn’t immediately available to comment. ECM Libra spokeswoman Maureen Jeyasooriar declined to comment on the deal.
ECM Libra rose 3.2 per cent to 80.5 sen at the mid-day break in Kuala Lumpur trading today after the Edge Financial Daily reported on the possible sale. Kenanga was unchanged at 70 sen, while the benchmark FTSE Bursa Malaysia KLCI Index climbed 1.5 per cent.
Book Value
Banks in Southeast Asia are engaging in a wave of mergers. RHB Capital Bhd, Malaysia’s sixth-biggest bank by market value, is in talks to take over local rival OSK Holdings Bhd’s investment banking unit. Malayan Banking Bhd, the country’s largest lender, acquired Singapore’s Kim Eng Holdings Ltd in May for S$1.79 billion (US$1.4 billion).
ECM Libra is seeking payment in cash of as much as 1.6 times the investment banking operation’s book value, one of the people said. Including the asset management business, ECM’s common equity stood at RM1 billion at the end of July, according to Bloomberg data.
Should the sale go through, ECM Libra will decide whether to return the proceeds to shareholders or acquire a new business, one person said. Kenanga has yet to receive regulatory approval for the acquisition from the central bank and the securities regulator, the people said.
Deutsche Asia Pacific Holdings Pte holds a 16.6 per cent stake in Kuala Lumpur-based Kenanga, according to the company’s website. The company’s biggest shareholder is CMS Capital Sdn Bhd, with a 25.1 per cent stake. -- Bloomberg
ECM Libra, which has a market capitalization of RM669 million (US$213 million), would retain only its asset management business after the sale, one person said, declining to be identified as talks are private. That unit accounted for about 3 percent of ECM Libra’s revenue in the quarter ending July 31.
The sale would help Azman Hashim, ECM Libra’s biggest shareholder, meet Malaysian central bank licensing rules that bar a single individual from being a key owner of more than one investment bank. Azman, who owns 24 per cent of ECM Libra, also indirectly holds almost 17 per cent of AMMB Holdings Bhd, Malaysia’s fifth-biggest lender by market value, according to data compiled by Bloomberg.
Kenanga is Malaysia’s eighth-biggest equities broker by trading volume, while ECM Libra is No. 10, according the stock exchange’s website. Kenanga spokesman Siti Maslinda Sheikh Othman wasn’t immediately available to comment. ECM Libra spokeswoman Maureen Jeyasooriar declined to comment on the deal.
ECM Libra rose 3.2 per cent to 80.5 sen at the mid-day break in Kuala Lumpur trading today after the Edge Financial Daily reported on the possible sale. Kenanga was unchanged at 70 sen, while the benchmark FTSE Bursa Malaysia KLCI Index climbed 1.5 per cent.
Book Value
Banks in Southeast Asia are engaging in a wave of mergers. RHB Capital Bhd, Malaysia’s sixth-biggest bank by market value, is in talks to take over local rival OSK Holdings Bhd’s investment banking unit. Malayan Banking Bhd, the country’s largest lender, acquired Singapore’s Kim Eng Holdings Ltd in May for S$1.79 billion (US$1.4 billion).
ECM Libra is seeking payment in cash of as much as 1.6 times the investment banking operation’s book value, one of the people said. Including the asset management business, ECM’s common equity stood at RM1 billion at the end of July, according to Bloomberg data.
Should the sale go through, ECM Libra will decide whether to return the proceeds to shareholders or acquire a new business, one person said. Kenanga has yet to receive regulatory approval for the acquisition from the central bank and the securities regulator, the people said.
Deutsche Asia Pacific Holdings Pte holds a 16.6 per cent stake in Kuala Lumpur-based Kenanga, according to the company’s website. The company’s biggest shareholder is CMS Capital Sdn Bhd, with a 25.1 per cent stake. -- Bloomberg
