This article first appeared in The Edge Financial Daily on March 29, 2019

KUALA LUMPUR: Kenanga Investment Bank Bhd’s asset management subsidiary, Kenanga Investors Bhd (KIB), has proposed to acquire ECM Libra Financial Group Bhd’s wholly-owned fund management arm, Libra Invest Bhd, for a provisional purchase consideration of RM50.1 million.

The final price tag will be based on the net asset value of Libra Invest on the last day of the month preceding completion date and a premium of RM35 million, Kenanga Investment Bank said in a statement yesterday.

“We are excited about the prospects of this transaction which affirms our ambition and commitment to growth, and intention to broaden our footprint in the area of asset and wealth management,” said the bank’s group managing director Datuk Chay Wai Leong.

“This highly complementary strategic acquisition is expected to propel KIB’s asset under management over the RM10 billion mark, enhancing its position as one of Malaysia’s leading unit trust and asset management companies,” he said.

Subject to regulatory approvals, the exercise is expected to be concluded by the third quarter of 2019, said Chay.

The statement said Libra Invest will complement KIB’s successful and well-recognised equity product line-up, representing a substantial expansion of its investment offerings and expertise.

“With the combined high-performing investment teams and leading edge products, clients and our business partners will have access to a broader selection of solutions, while enjoying enhanced overall customer experience,” said KIB executive director and chief executive officer Ismitz Matthew De Alwis.

Both KIB and Libra Invest are regular and repeat recipients of distinguished industry accolades, such as the Lipper, Fundsupermart and Morningstar awards, which recognise the outstanding achievements of their equity and fixed-income funds respectively, the statement said.

“The synergies from the combined entity will be a driving force to accelerate growth and strengthen our business over the long term,” said Izmitz.

Shares in Kenanga Investment Bank closed one sen or 1.92% higher at 53 sen yesterday, with a market capitalisation of RM383.05 million.

ECM Libra shares were untraded yesterday. The counter closed at 27 sen last Thursday, valuing the group at RM129.58 million.