Friday 29 Mar 2024
By
main news image

KUALA LUMPUR (Nov 6): Confirming speculation that a merger would be inked today, Malaysia Building Society Bhd (MBSB) announced it would be buying the entire interest in Asian Finance Bank (AFB) for RM644.95 million.

The purchase will be satisfied via RM396.89 million in cash and an issuance of 225.51 million new ordinary shares in MBSB at RM1.10 apiece, the non-bank lender said in a filing with Bursa Malaysia.

The proposed issue price represents a 1 sen discount to MBSB’s closing price of RM1.11 last Friday, and will enlarge MBSB’s share base by 225.51 million shares.

MBSB signed a conditional share purchase agreement (SPA) with AFB’s shareholders Qatar Islamic Bank (QIB), RUSD Investment Bank Inc and Tadhamon International Islamic Bank, and Financial Assets Bahrain WLL to effect the acquisition today.

QIB, AFB’s largest shareholder with a 66.66% stake, opted for both the cash and shares option. RUSD and Tadhamon International both agreed to take the shares option while Financial Assets Bahrain opted for the cash option.

The cash consideration represents a valuation of 1.2 times of AFB’s net assets of RM496.12 million while the shares option represents a valuation of 1.5 times.

The proposed issuance will dilute the shareholdings of MBSB’s largest shareholder, the Employees Provident Fund (EPF) to 63.16% from 65.56%. Second largest shareholder Tan Sri Chua Ma Yu will see his holdings diluted to 8.45% from 8.78%.

On completion of the proposed acquisition, MBSB will transfer all its Shariah-compliant assets and liabilities to AFB, for which AFB shares will issue new shares to MBSB, at an issue price to be fixed.

As a result of the proposed merger, MBSB plans to exchange its outstanding covered sukuk, which has a nominal value of RM2.53 billion, into a new structured covered sukuk to be issued by AFB, under a new sukuk programme to be set up by the latter.

The proposed merger is expected to be completed in the first quarter of 2018, MBSB said.

The deal, which confirms an earlier report by The Edge Malaysia weekly in June, will make MBSB the second largest standalone Islamic bank in the country, with total assets of about RM44 billion.

It is MBSB's third attempt to acquire an Islamic banking unit in order to become a full-fledged Islamic bank.

Shares in MBSB, which were halted from trading today, will resume trading tomorrow at 9am.

      Print
      Text Size
      Share