Maybank Offers $2.7 Billion for Bank Internasional

Maybank Offers $2.7 Billion for Bank Internasional

March 26 (Bloomberg) -- Malayan Banking Bhd., Malaysia's biggest bank, offered as much as $2.7 billion for PT Bank Internasional Indonesia to become the largest foreign financial services company in the Southeast Asian nation.

Maybank beat Bank of China Ltd. to buy a 56 percent stake held by a group led by Singapore sovereign wealth fund Temasek Holdings Pte for $1.5 billion, or about 23 percent more than yesterday's closing price. Maybank will also offer $1.2 billion for the rest of the stock, it said in a statement today.

The offer values Bank Internasional at about 4.7 times book value, roughly double the average valuation among Indonesia's publicly traded lenders, data compiled by Bloomberg show. A takeover would give Maybank 230 branches in the world's fourth- most populous country, a market it said is ``under-penetrated.''

``It's a bit pricey,'' said Li Hsia Wong, an analyst at Affin Securities Sdn. in Kuala Lumpur. ``To really have stronger growth they need to look outside Malaysia. The Malaysian market is quite saturated.''

Bank Internasional, Indonesia's sixth-largest bank, surged 12 percent to 465 rupiah at the midday break in Jakarta, the biggest one-day gain since April 2, 2004. The stock has risen 63 percent this year, compared with a 10 percent drop in the Jakarta benchmark index.

Maybank's bid for the remaining stock is equivalent to 509 rupiah a share, based on Bloomberg calculations by dividing the amount offered for the 44 percent stake by Bank Internasional's outstanding shares. Maybank didn't provide per-share figures for the offer.

`Good Buy'

Maybank shares were suspended on the Kuala Lumpur stock exchange before the announcement. The stock closed at 8.95 ringgit yesterday, down 2.7 percent this year.

``For anyone that doesn't have exposure to the Indonesian banking sector, this would be a good buy,'' said Winston Sual, director of PT Panin Sekuritas, which manages $272 million at its fund management division.

Temasek and its partners won a bid for a 51 percent stake in Bank Internasional in 2003. The bank was the third Indonesia sold that year to fund a budget deficit and as part of state asset sales following the 1997 Asian financial crisis.

The sale of Bank Internasional will allow Temasek and its partners to profit from an investment that has soared about fivefold since they first paid 1.99 trillion rupiah ($216 million) for the stake in Bank Internasional.

Government Bailout

Temasek owns 75 percent of a joint venture that holds about 56 percent of Bank Internasional. Kookmin Bank, South Korea's largest, owns the remaining 25 percent. Kookmin Bank fell 1.4 percent in Seoul trading today.

Bank Internasional, formerly part of the Sinar Mas Group, owned by Eka Tjipta Widjaja's family, received a 11.3 trillion rupiah government bailout in June 1999 in the aftermath of the regional crisis.

Industrial & Commercial Bank of China Ltd. and State Bank of India have made acquisitions in Indonesia in the past two years, gaining a foothold in an economy that grew 6.3 percent in 2007. Temasek said in a statement it remains ``optimistic'' about Indonesia's long-term prospects.

``The Indonesian banking sector remains under-penetrated with excellent long-term growth potential,'' Maybank Acting Chief Executive Officer Aminuddin Md Desa said in today's statement. ``This acquisition effectively enables Maybank to leapfrog into the Indonesian banking market.''

Overseas Push

Maybank, based in Kuala Lumpur, is expanding overseas as economic growth slows at home and competition increases from foreign lenders such as Australia & New Zealand Banking Group Ltd. The Malaysian bank said in February 2007 it would seek to buy into an overseas lender in one to two years to help boost profit.

Temasek, set up more than three decades ago to hold the city's state-owned assets, is selling its stake to meet Indonesia's central bank rules that limit investors to ownership of one bank. It also owns part of PT Bank Danamon Indonesia.

Credit Suisse Group and Goldman Sachs Group Inc. are advising Temasek.

BLOOMBERG