Published September 22, 2008

BII stake: Maybank seeks clarification

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(JAKARTA) Malayan Banking Bhd, which is buying an Indonesian banking stake for US$2.7 billion, is seeking further clarification from the country's regulator after getting a conditional exemption from a rule governing its purchase.

Maybank is seeking clarification from the Indonesian markets regulator 'on the interpretation of their conditional extension', it said in a statement to the Indonesia Stock Exchange.

It will also be 'engaging' Singapore's Temasek Holdings and Kookmin Bank, which are selling the controlling stake in PT Bank Internasional Indonesia (BII), on the completion of the acquisition.

The Indonesian regulator's move to conditionally extend a two-year deadline for buyers to sell 20 per cent of the target back to the market helped revive the deal after it was blocked by Malaysia's central bank.

Indonesia said it would extend the deadline should Maybank stand to lose more than 10 per cent of its investment, without giving a time frame for the extensions.

'Maybank is assessing its financial risk of acquiring Bank Internasional Indonesia at 4.7 times price to book value,' said David Chang, head of research at PT UOB Kay Hian Securities in Jakarta. 'Without sufficient financial resources, it appears that Maybank may have bitten off more than it can swallow.'



A Maybank spokesman was unable to comment on the filing immediately. The transaction has to be completed by Sept 26.

Indonesia may give six-month extensions, Bisnis Indonesia newspaper reported last Thursday, citing M Noor Rachman, head of corporate finances for the services industry at the market regulator.

Ahmad Fuad Rahmany, chairman of the regulator, said on Friday the agency hasn't decided on the extension period. 'We don't want other people to suffer losses,' he told reporters.

Malaysia's central bank opposed the deal over concern Maybank would lose RM3.4 billion (S$1.42 billion) by meeting the takeover rule, Maybank CEO Abdul Wahid Omar said on Aug 27. Maybank is buying the controlling stake in the Indonesian bank from Temasek and Kookmin Bank. -- Bloomberg