Bank Muamalat listing? IPO a challenge due to volatile market

A potential listing of Bank Muamalat Malaysia Bhd could be an option should its major shareholder DRB-Hicom Bhd fail to find a suitable suitor to buy up a stake in the bank. The requirement to pare down DRB-Hicom’s stake in Bank Mualamat is to comply with Bank Negara’s requirements from current 70% to 40%, which has been delayed for a few years. Last week, the proposed merger between Malaysia Building Society Bhd (MBSB) and Bank Muamalat was called off as the parties involved were not been able to reach an agreement on the terms and conditions. Disagreement over valuations and control were believed to be factors that led to the breakdown of negotiations that began last October.

Malaysia: Khazanah may offload holding in Bank Muamalat, ahead of merger

State investment fund Khazanah Nasional Bhd is expected to dispose off its entire 30 per cent interest in Bank Muamalat to major shareholder DRB-Hicom Bhd ahead of the proposed merger between Bank Muamalat and Malaysia Building Society Bhd (MBSB) materialises. There is no point holding on to the stake since its holdings would diminish in the merged entity. Moreover, it would not be a problem for DRB-Hicom which already owns 70 per cent interest in Bank Muamalat to purchase Khazanah’s interest. Khazanah managing director Azman Mokhtar had told reporters that it would wait for the outcome of the merger talks before deciding what to do with its stake.

Malaysia's DRB-Hicom to sell 30 pct Bank Muamalat stake-source

DRB-Hicom wants to sell 30% of its 70% stake at the Bank Muamalat Malaysia that is partly owend by the Malaysian state. Malaysia's central bank has allowed AFFIN Holdings to enter talks with DRB-Hicom in order to reduce its stake to a maximum of 40%. Should the deal be successful, AFFIN would become the forth-largest Islamic bank measured by assets.

See more under: http://in.reuters.com/article/2012/09/20/malaysia-drbhicom-bank-idINL4E8...

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