Showing posts with label OSK. Show all posts
僑豐控股併購整合‧1+1大於2
僑豐控股（OSK，5053，主板金融組）創辦人兼董事丹斯里黃宗華向來低調，日前在旗下僑丰投資銀行與興業資本（RHBCAP，1066，主板金融組）進行重大合併交易，邁入一個新里程碑之際，破例罕有地在一項匯報會上，暢談整合行動來龍去脈，對公司所帶來的影響，一些經營理念，以及厘清及解開市場對整合行動的一些疑慮。
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OSK
OSK's Chairman telling more on Post merger plan
Saturday June 16, 2012
OSK may look at new core business
But the focus currently is to make sure merger with RHB is completed, says its founder
KUALA LUMPUR: OSK Holdings Bhd, which is in the midst of merging its investment bank with RHB Capital Bhd, will possibly look for a new core business upon completion of the current merger deal with RHB.
“Our focus is ensure that the deal is completed,'' said Tan Sri Ong Leong Huat, director of OSK Holdings.
The transaction, estimated to take another three months for completion, will result in, among other things, OSK Holdings having a 10% stake in an enlarged banking entity with revenue from investment and also commercial banking that can be equity accounted.
“We have to get the people integrated and let the business run in full swing. The investment we have put into RHB Cap is over RM1 billion and we have to ensure this gives us better returns ... that one plus one is four or five, not two.
“My family is already in other businesses. We have property development and management, hotels and manufacturing. Investment banking is just one of it,'' said Ong at a media briefing. As (the former) CEO of the investment bank, he could not get involved in other businesses but as a financier, he had to know how business works and how to create value for the clients.
Expressing concern over the sharp drop in the share price of OSK Holdings, he reckons in any merger and acquisition deal of this size, it was inevitable for a lot of assumptions to crop up.
“The big question is why is the OSK share price dropping?'' he asked, referring to assumptions that since OSK was selling off its jewel investment banking business, it could become a PN17 company with no more core business.
Since the deal is not yet completed, OSK cannot disclose the utilisation of the funds or assets arising from the deal.
We do have sufficient income to pay dividend as we have been paying all these years,'' says Ong.
Among other things. OSK Holdings has:
● rental income of RM10mil per annum
● OSK Capital's profit before tax at RM20mil.
● a 100% in OSK Capital, a capital financing business with book value of RM78.3mil as at March 31.
● property assets RM272.9mil
● cash of RM174.3mil from the merger deal involving a 10% stake in RHB Cap that is worth RM1.7 bil
● net assets of RM2.339bil
With a base of 965 million shares, that would translate into a net asset value per share of RM2.43.
“The short term value does not reflect the true value of the shares,'' saysU Chen Hock, CEO of OSK Investment Bank.
“We manage the underlying business and extract as much value for the shareholders as possible. The current market value at of RM1.35/6 is a sharp discount of 44% to the net asset value of RM2.43.''
“It is left to the wisdom of investors to see value there, why we undertake this exercise, is it detrimental to the shareholders or beneficial?
“As far as we are concerned, we are running the business and deliver returns and value to the shareholders.
On whether there would be a special dividend, Ong says that can be decided only after the deal is completed, possibly in another three months.
“From the first day of listing on May 31, 1991, till today, OSK Holdings has been paying consistent dividends biannually.
“We preserve profits that we make in good times; even during the Asian financial crisis in 1997 and global financial crisis of 2008, we were paying dividends,'' says Ong.
OSK started with 80 million shares; today, it has over 950 million shares. Dividend-in-specie is also paid from two public other companies - OSK Ventures and OSK Property Holdings.
“Whatever we can pass back to the shareholders, we will do so but we cannot do a deal and then pass out everything as dividends and close the business.
“There's nothing wrong with the company; why should we pay out everything?
“When we stop the business, there is nothing we can use to build up the company.
“Now with the assets, cash and other components of the business, we can leverage on those assets and continue to do good business.
“The board of directors comprise very experienced people, the record speaks for itself that we know how to do business.''
In terms of the merger deal with RHB Cap, Ong said: “It was thought through as value creation deal which would create a bigger talent pool.
“Our specialisation is in small and mid-cap businesses.
“As a standalone organisation, we can grow faster; we do not have a big balance sheet and that limits the facilities that we can grant.
“Our clients have outgrown our capability to serve them and we want to continue growing with the bigger ones. That is where we see the value enhancement of the merger deal to all stakeholders.
“Our staff are also excited to do bigger deals.''
By Yap Leng Kuen
lengkuen@thestar.com.my
Tag :
OSK
OSK to sell investment banking biz to RHB Cap for RM1.97b
Comment: Since OSK plan to remain listed and keep the RHB shares, the minority shareholder will not directly benefit with the deal in short term.
KUALA LUMPUR: OSK Holdings Bhd (OSKH) is disposing of its investment banking business to RHB Capital Bhd for RM1.97bil to be satisfied via new RHB Cap shares and RM174.3mil cash, which would see OSKH getting a 10% equity stake.
KUALA LUMPUR: OSK Holdings Bhd (OSKH) is disposing of its investment banking business to RHB Capital Bhd for RM1.97bil to be satisfied via new RHB Cap shares and RM174.3mil cash, which would see OSKH getting a 10% equity stake.
OSKH said on Monday it would dispose of its 100% stake in OSK Investment Bank Bhd (OSKIB); 20% of OSK Trustees Bhd; 20% of Malaysian Trustees Bhd and 100% stake in OSK Investment Bank (Labuan) Ltd.
The total disposal consideration of RM1.977bil would be satisfied through the issuance of 245.0 million new RHB Cap shares to be issued at an issue price of RM7.36 per RHB Cap shares and cash of RM174.3mil, it said.
"The proposed disposal will enable OSKH to unlock the value of its investment in OSKIB Group, whilst the consideration shares to be received by OSKH will allow OSKH to equity account a prospective 10% stake in RHBC, which is a more liquid investment form compared to OSKIB," it said after entering into a conditional share purchase agreement with RHB Cap.
OSKH said the disposal consideration was based on OSKIB's unaudited consolidated net assets of RM1.102bil as at Sept 30, 2011 or at a price to book ratio valuation of about 1.77 times.
It added the issue price of the new RHB Cap shares of RM7.36 and the number of new RHB Cap shares to be received as part of the disposal consideration would be 10% equity interest in RHB Cap as at Dec 31, 2011.
"The issue price of RM7.36 represents a slight premium of 0.27% to the five-day volume weighted average market price of RHB Cap shares up to and including May 25, 2012 of RM7.34," it said.
OSKH added the cash portion of RM174.3mil would be used to defray the estimated expenses for the proposed disposal, repayment of bank borrowings of OSKH group and to fund OSKH's on-going businesses.
It also said the unaudited net assets of OSK Trustees, Malaysian Trustees and OSKIB Labuan as at June 30, 2011 were about RM5.13mil, RM9.15mil and RM21.61mil respectively. (The Star Biz)
興業19.8億購僑豐投行‧保持上市地位
（吉隆坡28日訊）興業資本（RHBCAP，1066，主板金融組）建議以19億7千750萬令吉，藉現金和發股方式全購僑豐控股（OSK，5053，主板金融組）的投資銀行業務。
僑豐將持興業10%
一旦收購完成，僑豐控股將因持有興業資本的10%股權崛起成為顯著股東，同時將保持上市地位。
根據兩家公司的文告，興業資本將以現金1億7千430萬令吉，再結合2億4千500萬股、每股售價7令吉36仙的新股進行上述收購。售價比興業資本5月25日股價7令吉34仙的5天加權平均價多0.27%。
興業資本收購的公司包括僑豐投資銀行和僑豐投資銀行（納閩）的100%股權，以及僑豐信托和大馬信托的20%股權。該行將透過內部資金和貸款融資收購計劃。
由於上述計劃將導致僑豐控股成為PN17公司，而董事部卻有意保持其上市地位，因此僑豐控股將向大馬股票交易所申請豁免，並繼續以其他持續業務和興業資本持股立足。
僑豐控股估計，脫售以上資產將帶來約8億5千332萬令吉收益，脫售所得1億7千430萬令吉現金主要用作償還貸款並融資業務，而當中的1億5千430萬令吉將充作公司的營運資本。（星洲日報／財經）
RHBCap, OSK may sign share purchase deal in 2 weeks
PETALING JAYA: A conditional share purchase agreement between RHB Capital Bhd and OSK Holdings Bhd could be signed in one to weeks, after the Finance Ministry (MOF) gave its nod for their proposed merger last Friday, CIMB Research said.
“By then, the details of the deal will be disclosed,” it said in a report, adding that the news of MOF's approval was not a surprise “as we did not expect any issues to hinder the deal and the negotiations were progressing smoothly”.
StarBiz reported on Friday that the merger was believed to have received the green light from the central bank and was awaiting a decision from the ministry.
Various obstacles had delayed the merger from its original first-quarter completion target, such as securing the approvals of overseas banking and financial regulators, the need to iron out “political and management” issues, and the search for a “neutral” investment banking head.
An analyst told StarBiz that OSK director and major shareholder Ong Leong Huat was the most likely candidate to head RHB's enlarged investment banking (IB) arm given his years of experience as a stockbroker.
He said it was probable too that OSK's IB team would be picked to run RHB's IB business, following some high-level departures at the latter in recent years.
Ong built OSK into the fourth largest retail broker in the country just behind RHB, and other listed companies in his stable include OSK Property Holdings Bhd and OSK Ventures International Bhd.
Kenanga Research in note dated April 19 cited culture shock as a key impediment holding back the merger. “RHB operates under a conservative approach while OSK IB is more of an entrepreneur-driven IB that is more aggressive and risk-taking.” .
Nonetheless, it said the proposed merger would be beneficial in the medium to long term.
“We believe OSK IB is strategically an ideal fit for RHB and will add significant diversification of clienteles and scale in the capital market and also provide an immediate access for RHB into other Asean markets.”
Meanwhile, Alliance Research analyst Cheah King Yoong believes the mode of settlement for the merger exercise would be via a combination of cash and new shares.
A 100% share offer, he pointed out, could dilute RHB Cap's earnings, which might not allow the acquiring company to fully optimise the synergistic benefits, while an all-cash settlement may not be ideal for management retention and could be negative from a cashflow standpoint.
The merger will make RHB the country's largest stockbroking firm with nearly 15% market share, overtaking current top-seater CIMB Securities, which has a 10.5% share.
It will become the fourth largest financial services group by assets and see its footprint expanded to markets like Indonesia, Cambodia, Hong Kong and China.
OSK has stockbroking operations in Indonesia, Cambodia, Hong Kong, Thailand and China, and RHB has presence in Singapore, Thailand and Brunei.- The Star Biz
Tuesday May 1, 2012
RHB, OSK get ministry nod for merger plan
RHB Capital Bhd (RHBCap) and OSK Holdings Bhd have received the approval from the Ministry of Finance (MoF) for the proposed merger of the businesses of RHB Banking group and OSK Investment Bank Group.
In separate filings to Bursa Malaysia today, RHBCap and OSK said they received the notifications from Bank Negara Malaysia on the approval granted by the ministry.
"The terms and conditions of the proposed merger will be announced subject to the execution of the conditional share purchase agreement for the proposed merger," they said. -- BERNAMA
In separate filings to Bursa Malaysia today, RHBCap and OSK said they received the notifications from Bank Negara Malaysia on the approval granted by the ministry.
"The terms and conditions of the proposed merger will be announced subject to the execution of the conditional share purchase agreement for the proposed merger," they said. -- BERNAMA
RHBCap-OSK merger believed to have received Bank Negara approval
Deal awaits ministry nod
PETALING JAYA: The RHB Capital Bhd-OSK Holdings Bhd merger deal is believed to have received the nod from Bank Negara and is now awaiting approval at the Finance Ministry level, according to sources.
“It will probably take another two to three weeks before an announcement is made,'' an analyst told StarBiz.
While most analysts had expected this nod, some industry players expressed surprise that the issues that were said to have held up the approval process could be resolved so fast.
“The market and industry have to make up their minds,'' said an observer. “One moment, they say the authorities are dragging their feet. The next moment, they question why was the process so fast.''
Among the issues apparently are those related to pricing; talk that CIMB is still interested in RHB, hence the rationale for RHB buying OSK; and that most department heads proposed for the investment bank are purportedly from OSK.
“At a pricing of close to two times book value, the goodwill incurred for taking over OSK could be around RM1bil,'' said an industry player.
At at Dec 31, 2011, OSK group shareholders' fund stood at RM1.041bil.
“That would be a lot to pay if it is indeed true that RHB could be taken over by CIMB.''
Also, this is regarded to be a complex deal that will see RHBCap's reach extended to markets like Indonesia, Cambodia, Hong Kong and China.
RHBCap and OSK had, as far back as Jan 11, applied for the central bank's approval for their merger.
Internally, RHB has set a target for the completion of the deal at the end of the third quarter.
Analysts said no doubt, this was a merger and acquisition story, but there could be a knee-jerk reaction on earnings at RHB, depending on the price paid for OSK. “As long as the valuation is not significant, the deal would be neutral to positive,'' said an analyst.
The regional footprint that RHB gains from this deal will be significant especially when it has had little success so far, with its acquisition of PT Bank Mestika dependant on changing bank rules in Indonesia.
“Investment banking operations in RHB have been quiet they have lost quite a few people who have not yet been replaced,'' said another analyst.
“This deal helps them get some replacements.''
With RHB mostly in institutional business and OSK in the mid-sized and commercial sector, there appears to be little overlap between the two - The Star Biz
Friday April 27, 2012
Various issues need to be resolved for RHB-OSK merger to proceed
KUALA LUMPUR: Securing the approvals of overseas banking and financial regulators, the search for a “neutral” investment banking head and the need to iron out other “political and management” issues are some of the reasons why the RHB Capital Bhd (RHBCap)-OSK Holdings Bhd merger has yet to be concluded.
Speaking at separate press conferences after the AGMs of their respective companies held yesterday, top officials from RHBCap and OSK shared similar views when asked about the proposed merger.
RHBCap group managing director Kellee Kam said he hoped the proposed merger would be concluded by the third quarter of this year.
“We are actively in dialogue with Bank Negara, part of this is because of the complexities of the transaction which transcends various regional jurisdictions.
At OSK: Ong (left), chairman Datuk Nik Mohamed Din and U fielding questions at a press conference.
“Our current target for the completion of the proposed merger is towards the end of the third quarter, but given the various foreign jurisdictions involved, please allow some flexibility in that,” Kam said.
The proposed merger, which would create the largest stockbroking firm in the country with close to a 15% market share, was first mooted last September.
OSK chief executive officer cum executive director U Chen Hock said Bank Negara and the Securities Commission had additional queries for both RHBCap and OSK after the submission of the documents to the regulators.
“In the run-up from the submission of the application, we, together with RHBCap, have answered some of the queries.
“We have provided all the necessary answers for the queries,” U said, without wanting to disclose what these additional queries were.
OSK director and major shareholder Ong Leong Huat said that whatever the regulators had wanted to know had already been answered. He added that OSK would now wait for the regulators' response.
At RHB: Kam and RHB Bank MD Johati Abdul Muid (right) meeting the media.
“Of course (this deal) has still to get the Finance Ministry's approval even after Bank Negara (and SC) approval as it involves a change of ownership in a bank,” Ong said without giving any timeframes.
U said the proposed merger would not only need the approval from the Malaysian regulators but also required the green light from other foreign regulators in which both groups are operating in.
“We have to clear the domestic regulators first before we move to the next step. We will then need to get approval from regulators in Singapore, Hong Kong, Cambodia, Indonesia and Thailand,” U said.
OSK runs stock-broking businesses in Indonesia, Cambodia, Hong Kong, Thailand and China, while RHB has a presence in Singapore, Thailand and Brunei. RHB is also in the process of acquiring an Indonesian lender.
RHBCap's Kam said: “One of the reasons why we are pretty excited about this merger is that it will help us expand into markets where OSK has a presence in,”
Meanwhile, people close to the proposed merger said RHBCap had been looking to hire a new CEO for the merged investment banking business. “They are looking for a candidate that will be seen as neutral and one who is able to bring together and strengthen the merged investment banking business,” said an industry observer.
At the moment, OSK's investment banking business is seen as more “entrepreneurial-driven” while RHBCap is generally seen as a more “conservative” outfit.
From : The Star Business
合併後放眼全球化‧僑豐：黃宗華或淡出
（吉隆坡10日訊）僑豐控股（OSK，5053，主板金融組）董事黃宗華指出，僑豐控股與興業資本（RHBCAP，1066，主板金融組）合併，主要是為股東與利益持有人提供附加價值，以及加強競爭力，特別是該公司立志要成為區域甚至是全球性的投資銀行。
詢及他在合併後擔任的角色，黃宗華表示，目前他還是公司的大股東及董事局成員之一。一旦交易通過，他在公司的角色將胥視新股東及董事局決定，同時也要獲得管制當局包括國家銀行的批准。
僑豐興業乐观待審批‧興業：或第三季完成
（吉隆坡10日訊）興業資本（RHBCAP，1066，主板金融組）與僑豐控股（OSK，5053，主板金融組）屬下僑豐投資銀行的合併計劃現仍處於國家銀行審批階段，有望在未來數週內有消息，並放眼在今年第三季完成整體收購計劃。
兴业资本董事经理甘志强表示，公司和国家银行有过几次会面，预计第三季可完成收购侨丰控股计划。
兴业资本已在今年1月中呈交收购侨丰控股计划予国行，市场一直关注国行何时会给予批准。 侨丰控股董事黄宗华也透露，据了解，兴业资本已经将所需的资料呈交给国行，现在只能等待批准。
不过，在获得国行首肯后，这项交易还需获得证券监督委员会、财政部，以及公司海外业务据点的监管单位同意，因此需时进行。
询及对这项合并计划事成的信心，黄宗华回应：“我觉得没有理由为什么（不获批准）……”
兴业资本董事经理甘志强表示，公司和国家银行有过几次会面，预计第三季可完成收购侨丰控股计划。
兴业资本已在今年1月中呈交收购侨丰控股计划予国行，市场一直关注国行何时会给予批准。 侨丰控股董事黄宗华也透露，据了解，兴业资本已经将所需的资料呈交给国行，现在只能等待批准。
不过，在获得国行首肯后，这项交易还需获得证券监督委员会、财政部，以及公司海外业务据点的监管单位同意，因此需时进行。
询及对这项合并计划事成的信心，黄宗华回应：“我觉得没有理由为什么（不获批准）……”
OSK target 50% contribution from oversea operation within next 3-5 years
OSK Holdings Bhd aims to balance the contribution from its overseas and domestic businesses, within the next three to five years, driven by its newly-formed overseas strategic alliances.
OSK Investment Bank chief executive officer U Chen Hock said currently, the overseas business contributed about 25 per cent to the Group's overall income.
"Three strategic alliances were formed in the course of the year with brokers in other countries, namely, Vietnam-based Sacombank-SBS, Japan-based Okasan Securities Company Ltd and US-based Auerbach Grayson and Company Ltd," he told a press conference after the Group's annual general meeting here today.
OSK Holdings' investment banking arm across the region completed a total of 23 mergers and acquisition deals last year, worth US$4.7 billion.
On the Group's 2011 operating performance, he said it has gained market share in Indonesia, Thailand and Singapore.
For the current year, the Group's main focus will be to continue to build on its regional network, with the completed acquisitions of OSK Thailand and Malaysian Trustees Bhd, to maximise the synergies.
On its proposed merger with RHB Capital Bhd, OSK Holdings director Ong Leong Huat said they are waiting for the regulators' feedback.
He also said that the objective of the merger is to add value for shareholders and stakeholders, as well as be more competitive in the global market.--BERNAMA
Read more: OSK seeks to balance revenue contribution
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Malaysia Corporate News,
OSK
RHB and OSK : Acquisition or Merging?
From RHB's view
KEY DEVELOPMENTS IN 2011
Our proposed acquisition of OSK Investment Bank (OSKIB), currently pending approval from Bank Negara Malaysia, marks another significant milestone towards the creation of the largest investment bank and brokerage houses in Malaysia. The proposed acquisition will accord us immediate access to the large retail broking market that will complement the Group’s strong institutional broking position as well as to have access to important strategic markets in the region with long-term growth potential. The RHB Banking Group will also be able to leverage on the OSKIB Group’s human capital to further expand RHB’s talent bandwidth. ( From RHB 2011 Annual Report)
From OSK's view
The most significant corporate development for 2011 was when the Group commenced negotiations with RHB Capital Berhad (RHBC) on a possible merger of the businesses of OSK investment banking group and RHB banking group (Possible Merger) upon receiving Bank Negara Malaysia (BNM) approval on 13 October 2011. Subsequently, on submitted an application to BNM seeking the relevant approvals in relation to the Possible Merger from the Minister of Finance (MOF) (through BNM). (From OSK FY 2011 Annual Report )
KEY DEVELOPMENTS IN 2011
Our proposed acquisition of OSK Investment Bank (OSKIB), currently pending approval from Bank Negara Malaysia, marks another significant milestone towards the creation of the largest investment bank and brokerage houses in Malaysia. The proposed acquisition will accord us immediate access to the large retail broking market that will complement the Group’s strong institutional broking position as well as to have access to important strategic markets in the region with long-term growth potential. The RHB Banking Group will also be able to leverage on the OSKIB Group’s human capital to further expand RHB’s talent bandwidth. ( From RHB 2011 Annual Report)
From OSK's view
The most significant corporate development for 2011 was when the Group commenced negotiations with RHB Capital Berhad (RHBC) on a possible merger of the businesses of OSK investment banking group and RHB banking group (Possible Merger) upon receiving Bank Negara Malaysia (BNM) approval on 13 October 2011. Subsequently, on submitted an application to BNM seeking the relevant approvals in relation to the Possible Merger from the Minister of Finance (MOF) (through BNM). (From OSK FY 2011 Annual Report )
200万滚出20亿资产 黄宗华展现福州人拼劲 (大马超级富豪NO.34)
大马超级富豪NO.34：200万滚出20亿资产 黄宗华展现福州人拼劲
2012-03-04 17:35
- 黄宗华是个做事相当积极的人，完全符合大马福州人被冠于“福州人积极做生意”的特质。
黄宗华带领奥斯克证券公司（OSK，侨丰控股前身）从一个200万缴足资本的证券行，发展出现今可被叫价约20亿令吉的侨丰投资银行。
RHB to wrap up OSK, Bank Mestika acquisitions
RHB Capital Bhd (RHBCap), which was reported to be signing a merger deal with OSK Investment Bank Bhd this week, reported an 8.4% drop in net profit in the last quarter to RM348.4 million from a year earlier on higher provisions.
Full-year net earnings, however, improved 5.7% to RM1.5 billion, or 68.9 sen a share.
"We are focused on concluding our proposed acquisitions of PT Bank Mestika in Indonesia and OSK Investment Bank, which when completed, will provide us access to all the key Southeast Asian markets and move us closer to realising our regionalisation aspirations,'' chairman Datuk Mohamed Khadar Merican said in a statement yesterday.
RHBCap had on Jan 11 submitted an application to Bank Negara Malaysia and the Minister of Finance to approve the merger of RHB banking group and OSK Investment Bank.
Meanwhile, the bank said on Feb 24 it had agreed to extend the deadline to complete the acquisition of an 80% stake in Bank Mestika from Feb 29 to June 30.
RHB derived most of its income from operations at home.
The bank said yesterday domestic loans grew by 15.7% in 2011 to outpace the industry's 13.6% growth rate. Its share of domestic loans improved to 9.3% as at Dec 31, 2011 from 9.1% a year ago.
Customer deposits grew 22.7% to reach RM115.9 billion, and the growth momentum, too, was faster than the industry's 14.3%.
To reward shareholders, RHBCap has proposed a final dividend of 17.84 sen a share to bring its full-year payout to 25.4 sen a share.
"This is in line with the group's stated dividend policy of 30% payout ratio," Mohamed Khadar said.
Posted on 29 February 2012 - 05:36am
RHBCap-OSK merger likely to be all-share deal
PETALING JAYA: The proposed RHB Capital Bhd-OSK Holdings Bhdmerger, due to be sealed soon, will be paid for entirely in shares, banking sources said.
OSK is expected to receive RHBCap shares worth around RM2bil the reported price of the deal in exchange for the former's investment banking business.
At this stage, it is not clear what OSK will do with the RHBCap shares.
Sources said it was likely OSK might hold on to the RHBCap shares for a while before deciding what to do.
“It is possible that some sort of agreement has been struck for OSK not to dispose of those shares immediately or to distribute them quickly to its (OSK's) shareholders via dividend in specie.
“This is to ensure that there would not be an immediate overhang of RHB shares in the market and more importantly, it will give OSK time to better understand what the merged entity is all about as well as understand RHBCap's plans going forward,” a banker said.
OSK, founded by Ong Leong Huat, has interests in banking and property. According to Bloomberg data, Ong's stake in OSK is 31.3%.
Earlier, it had been speculated that OSK and Ong may have preferred a cash element in the deal but sources said that was never part of the offer from RHBCap.
The merger makes sense for OSK as it is difficult to survive as a stand-alone stockbroking house, given the increasing competition in the industry. “It is better to be bank-backed, and selling out now at a relatively good valuation is a good idea,” a banking analyst said.
At RM2bil, this works out to around two times the book value of OSK's investment banking business.
Last year, Hong Leong Bank Bhd paid 1.4 times price-to-book for EON Capital Bhd.
Meanwhile, when contacted, an official from RHBCap said the banking outfit was awaiting Bank Negara approval for the proposed transaction.
“Hence, we are not in a position to say much about the structure of the transaction. Further details on the proposed merger will be shared upon obtaining approval from Bank Negara,” he said.
The deal, if and when it goes through, will create the largest stockbroking house in the country, overtaking CIMB Investment.
On RHBCap's future plans including a possible acquisition of Malaysia Building Society Bhd (MBSB), the RHB official said: “The group is always on the lookout for strategic opportunities that fit into its aspirations. Announcements will be made if such good opportunities arise.”
It was reported recently that MBSB, a non-bank lender to civil servants, could be a likely target of RHBCap after the deal with OSK was sealed, given that the Employees Provident Fund (EPF) is a common shareholder of both firms.
The EPF holds a 44.84% stake in RHBCap and a 65.5% stake in MBSB.
RHBCap and OSK finished 15 sen and one sen higher respectively at RM7.95 and RM1.80 yesterday.
Thursday March 1, 2012
RHBCap, OSK to announce merger this week
PETALING JAYA (Feb 27, 2012): RHB Capital Bhd and OSK Holdings Bhd are expected to announce this week the highly anticipated merger between RHBCap's banking business and OSK Investment Bank Bhd (OSK IB), which would create the country's largest brokerage by trading value and volume, sources said.
"An announcement to Bursa Malaysia will be made later this week, and subject to relevant approvals, the merger transaction would be completed in the first half of this year," a source toldSunBiz.
Earlier, it was reported that the deal will see OSK, built up by veteran stockbroker Ong Leong Huat, injecting its investment banking, wealth management and stockbroking assets into RHBCap, the country's fifth-largest lender. OSK and RHBCap have been in talks since receiving the nod from Bank Negara Malaysia last October.
The value of the deal is being touted at RM1.9 billion to RM2.5 billion, based on OSK IB's net asset value of RM1.25 billion as at December 2010.
The most recent comparative is Malayan Banking Bhd's acquisition of Singapore brokerage Kim Eng Holdings Ltd at 1.9 times price-to-book-value (P/BV), and analysts said the acquisition price of OSK IB should be lower as Kim Eng has a stronger regional presence.
Another comparative is K&N Kenanga Holdings Bhd, which is reportedly close to an agreement to buy the investment banking and broking unit of ECM Libra Financial Group Bhd for RM900 million, or about 1.4 times ECM Libra unit's book value.
Analysts have said the merger of RHBCap, with a market capitalisation of RM16.9 billion, and OSK's RM1.7 billion, would create the largest Malaysian brokerage with a market share of around 15% by trading value and 17% by trading volume as at Sept 30, 2011.
In a Jan 6, 2012 report, HwangDBS Vickers Research Sdn Bhd said a merger with OSK IB would scale up RHBCap's domestic investment banking and broking platform.
The merger would also provide immediate access to capital markets in Singapore via OSK's 51%-owned subsidiary DMG & Partners Securities Pte Ltd, and Indonesia via OSK's 51%-owned subsidiary OSK Nusadana Securities.
RHBCap shares closed eight sen higher at RM7.66 on Friday, while OSK shares added one sen to RM1.76.
RHBCap hopeful of completing OSK deal by April
The banking group is also optimistic that its plan to buy small Indonesian lender PT Bank Mestika Dharma, first proposed in 2009, will go through this year.
"We hope to be able to get both these things done by this year. (On RHB-OSK), I don't want to speculate (when we'll get Bank Negara Malaysia's approval), but we are expecting by April to get the deal through," said Renzo Viegas, deputy managing of RHBCap's banking unit, RHB Bank Bhd.
RHBCap and OSK on January 11 applied for Bank Negara's approval for their merger.
For the merger to go through, RHBCap must also get the go-ahead from regulators in each market OSK Investment Bank operates in.
The latter has businesses in Singapore, Indonesia, Thailand, Singapore, Cambodia and Hong Kong, giving RHBCap a wider regional presence if the merger pans out.
"Every single regulator of where OSK operates has to approve," Viegas told Business Times on the sidelines of an RHB Bank event here yesterday.
As for Bank Mestika, he said Indonesia's central bank had asked the RHB group to re-submit its proposal "a couple of months" ago.
"... So it (prospects) looks better than what it was some time ago," he remarked.
Malaysian banks last year were nervous about buying into Indonesian banks when news emerged in July that Bank Indonesia - the central bank - was considering limiting foreign shareholding in banks to less than 50 per cent.
Bank Indonesia has yet to announce any such changes, and some analysts say this may mean that the plan may have been shelved for now.
RHBCap first announced it wanted to buy 80 per cent of small Medan-based Bank Mestika for some RM1.16 billion in October 2009. In December 2010, it made changes to the deal structure, with RHB Bank being proposed as the entity to undertake the purchase.
Meanwhile, Viegas said yesterday that RHB Bank hopes to double its Internet and mobile banking customer base to about one million by year-end from just over half a million now.
It has the fourth most-visited website among banks in Malaysia after Maybank, CIMB and Public Bank, according to Alexa Ranking, which ranks website traffic.
With that in mind, RHB Bank launched a campaign with Naza Group's Next Bike Sdn Bhd, the sole importer and distributor of the Ducati brand in Malaysia, where customers that perform any financial transaction via the Internet and mobile banking platforms, stand a chance to win an Italian Ducati Monster 795 bike, cash and Ducati merchandise.
