RHB Capital Bhd, Malaysia’s sixth-biggest banking group, may pay as much as RM1.9 billion (US$598 million) in shares for OSK Holdings Bhd’s investment bank, three people with knowledge of the matter said.
Talks between the two companies are now centered on a price range of RM1.8 billion to RM1.9 billion, said the people, who asked not to be identified as talks are private. The two banks expect to reach an agreement and seek approval from Malaysia’s central bank by mid-January, two people said.
RHB and OSK said on Oct. 14 that the central bank granted them a three-month window to negotiate the purchase. One of the remaining issues to be resolved is the treatment of some of OSK’s outstanding debt, one person said.
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 stock exchange. Malaysian banks and brokerages have been merging amid increased foreign competition. Hong Leong Bank Bhd. acquired EON Capital Bhdfor US$1.7 billion in May, while K&N Kenanga Holdings Bhd, a brokerage part-owned by Deutsche Bank AG, is in talks to buy the investment banking and broking operations of local rival ECM Libra Financial Group Bhd, two people with knowledge of the matter said on Dec. 1.
RHB may issue new shares worth as much as 10 percent of its existing equity to pay for the OSK unit, three people with knowledge of the matter said last month. The acquisition is still expected to be paid for in stock, two people said. The final price of the purchase will depend on what value is applied to the RHB shares that are issued, one person said.
RHB Chief Executive Officer Kellee Kam Chee Khiong, and U Chen Hock, chief executive officer of OSK Investment Bank didn’t immediately reply to phone calls and e-mails seeking comment.
RHB Capital rose 2.2 percent to RM7.29, while OSK climbed 1.7 percent to RM1.77 at the 12:30 p.m. midday break in Kuala Lumpur today. -- Bloomberg
Talks between the two companies are now centered on a price range of RM1.8 billion to RM1.9 billion, said the people, who asked not to be identified as talks are private. The two banks expect to reach an agreement and seek approval from Malaysia’s central bank by mid-January, two people said.
RHB and OSK said on Oct. 14 that the central bank granted them a three-month window to negotiate the purchase. One of the remaining issues to be resolved is the treatment of some of OSK’s outstanding debt, one person said.
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 stock exchange. Malaysian banks and brokerages have been merging amid increased foreign competition. Hong Leong Bank Bhd. acquired EON Capital Bhdfor US$1.7 billion in May, while K&N Kenanga Holdings Bhd, a brokerage part-owned by Deutsche Bank AG, is in talks to buy the investment banking and broking operations of local rival ECM Libra Financial Group Bhd, two people with knowledge of the matter said on Dec. 1.
RHB may issue new shares worth as much as 10 percent of its existing equity to pay for the OSK unit, three people with knowledge of the matter said last month. The acquisition is still expected to be paid for in stock, two people said. The final price of the purchase will depend on what value is applied to the RHB shares that are issued, one person said.
RHB Chief Executive Officer Kellee Kam Chee Khiong, and U Chen Hock, chief executive officer of OSK Investment Bank didn’t immediately reply to phone calls and e-mails seeking comment.
RHB Capital rose 2.2 percent to RM7.29, while OSK climbed 1.7 percent to RM1.77 at the 12:30 p.m. midday break in Kuala Lumpur today. -- Bloomberg
