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<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Maybank spurns 'improved BII deal'
</TR><!-- headline one : end --><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->Temasek Holdings said it offered a $236.4 million rebate to Malayan Banking to improve the terms of an Indonesian stake sale, which was not accepted at Friday's deadline for the transaction.
Temasek improved the terms for the controlling stake in Bank Internasional Indonesia (BII) after Maybank said the Malaysian central bank had blocked the US$2.7 billion (S$3.86 billion) deal last week on concern that it would suffer losses as global asset prices fell. Maybank is Malaysia's biggest bank by assets.
The rebate is more than the RM480 million (S$200 million) deposit Maybank stands to lose by walking away from the acquisition.
Temasek, which holds the stake through its unit Fullerton Financial Holdings, said it offered the rebate so Maybank would stick to the per-share price for the transaction.
'The offer was made by Fullerton in the interest of the minority investors in Indonesia', and the rebate meant Maybank could 'proceed with its earlier commitment to make a tender offer at 510 rupiah (8 Singapore cents) as per the share sale agreement', Temasek's Fullerton said in a statement yesterday. 'Fullerton will exercise all its rights under the share sale agreement.'
Temasek, with a US$130 billion portfolio, said it will explore its options with South Korea's Kookmin Bank, which is jointly selling their controlling stake in BII.
Maybank said in a statement on Thursday that the Malaysian central bank, Bank Negara, had ordered it to reduce the price or scrap the transaction, sparking a dispute with the Indonesian authorities and a record slump in BII's share price.
Temasek said Maybank first asked for a one-month extension and a price reduction on Wednesday, which it turned down a day later. It was informed of the objections by Bank Negara on Thursday at 11.32pm, it said.
Bank Negara wanted Maybank to renegotiate the price, first offered by the Malaysian lender six months ago, after stocks tumbled amid the global credit crunch.
Maybank's purchase price of 4.7 times book value, which was twice those of Indonesian banks at the time, was considered expensive by investors. That has driven Maybank's shares 23 per cent lower since the bid was first made.
Bank Negara cited the 'global financial turmoil' when it demanded changes to the deal, according to Maybank.
BII's shares plunged by a record 34 per cent to 310 rupiah on Friday. Maybank shares were unchanged at RM6.90.
Temasek itself was selling BII only to meet Indonesian central bank regulations.
Bank Negara has previously expressed concern that Maybank was paying too much.
The central bank earlier blocked the transaction on concern that a new Indonesian takeover rule will lead to losses at Maybank, but reinstated its approval on Sept 16 after the Indonesian regulator agreed to extend the timing for Maybank to comply with the new rule. Bloomberg
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Maybank spurns 'improved BII deal'
</TR><!-- headline one : end --><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->Temasek Holdings said it offered a $236.4 million rebate to Malayan Banking to improve the terms of an Indonesian stake sale, which was not accepted at Friday's deadline for the transaction.
Temasek improved the terms for the controlling stake in Bank Internasional Indonesia (BII) after Maybank said the Malaysian central bank had blocked the US$2.7 billion (S$3.86 billion) deal last week on concern that it would suffer losses as global asset prices fell. Maybank is Malaysia's biggest bank by assets.
The rebate is more than the RM480 million (S$200 million) deposit Maybank stands to lose by walking away from the acquisition.
Temasek, which holds the stake through its unit Fullerton Financial Holdings, said it offered the rebate so Maybank would stick to the per-share price for the transaction.
'The offer was made by Fullerton in the interest of the minority investors in Indonesia', and the rebate meant Maybank could 'proceed with its earlier commitment to make a tender offer at 510 rupiah (8 Singapore cents) as per the share sale agreement', Temasek's Fullerton said in a statement yesterday. 'Fullerton will exercise all its rights under the share sale agreement.'
Temasek, with a US$130 billion portfolio, said it will explore its options with South Korea's Kookmin Bank, which is jointly selling their controlling stake in BII.
Maybank said in a statement on Thursday that the Malaysian central bank, Bank Negara, had ordered it to reduce the price or scrap the transaction, sparking a dispute with the Indonesian authorities and a record slump in BII's share price.
Temasek said Maybank first asked for a one-month extension and a price reduction on Wednesday, which it turned down a day later. It was informed of the objections by Bank Negara on Thursday at 11.32pm, it said.
Bank Negara wanted Maybank to renegotiate the price, first offered by the Malaysian lender six months ago, after stocks tumbled amid the global credit crunch.
Maybank's purchase price of 4.7 times book value, which was twice those of Indonesian banks at the time, was considered expensive by investors. That has driven Maybank's shares 23 per cent lower since the bid was first made.
Bank Negara cited the 'global financial turmoil' when it demanded changes to the deal, according to Maybank.
BII's shares plunged by a record 34 per cent to 310 rupiah on Friday. Maybank shares were unchanged at RM6.90.
Temasek itself was selling BII only to meet Indonesian central bank regulations.
Bank Negara has previously expressed concern that Maybank was paying too much.
The central bank earlier blocked the transaction on concern that a new Indonesian takeover rule will lead to losses at Maybank, but reinstated its approval on Sept 16 after the Indonesian regulator agreed to extend the timing for Maybank to comply with the new rule. Bloomberg
