KUALA LUMPUR (Sept 30): Malaysia Building Society Bhd (MBSB) has obtained a three-month extension from Bank Negara Malaysia (BNM) to negotiate its proposed merger with Malaysian Industrial Development Finance (MIDF).
“On behalf of the board, AmInvestment Bank Bhd wishes to announce that BNM had vide its letter dated Sept 29, 2022 granted MBSB an extension of time to Jan 5, 2023, to conclude the negotiations with PNB for the proposed transaction,” said MBSB in a filing with Bursa Malaysia on Friday.
MBSB is 65.87%-owned by Employees Provident Fund while MIDF is wholly owned by Permodalan Nasional Bhd (PNB).
Earlier this month, The Edge Malaysia Weekly reported that the MBSB-MIDF merger proposal is progressing, with BNM approval expected by year end followed by its completion next year, quoting sources.
The deal could be effected via a share swap, and will see EPF holding a controlling stake in the merged entity, The Weekly for the week of Sept 5–Sept 11, 2022 quoted sources as saying.
MBSB’s asset size stood at RM50.85 billion as at end-June, while MIDF’s was RM8.73 billion as at end-March.
For MBSB, a merger would help cement its position as the country’s second-largest standalone Islamic bank by assets after Bank Islam Malaysia Bhd.
As for MIDF, the union would enable it to clinch an Islamic banking licence and widen its business scope. It currently focuses on three main businesses: investment banking (IB), asset management and development finance, The Weekly reported.
Back in April, the central bank had given MBSB the go-ahead to hold discussions with PNB to explore the possibility of undertaking an acquisition of a 100% stake in MIDF, giving the parties six months until Oct 5 to do so.
MBSB and PNB had on April 22 entered into an exclusivity agreement to negotiate solely with each other to finalise the structure, pricing, and terms and conditions of the proposed acquisition.
Shares of MBSB closed unchanged at 57.5 sen per share on Friday, giving it a market capitalisation of RM4.12 billion.