Maybank propose to take over Kim Eng

Malaysian leading financial services provider, Malaysian Banking Berhad or Maybank through its subsidiary, Aseam Credit Sdn Bhd (ACSB) entered into conditional sale and purchase agreements for the acquisition of 15.4% and 29.2% stakes in Kim Eng Holdings Limited.

Maybank proposed 44.6% stake acquisition in the ASEAN’s leading stock broker. The stock price is at S$3,10 per share, making the total purchase at S$798 million. Such proposed acquisition will make Maybank as the single largest shareholder of Kim Eng shares as it intends to control the remaining 55.4% stock.

Supposed Maybank controls the entire stake of Kim Eng, the transaction value shall reach S$1.79 billion.

Kim Eng’s total asset and shareholders; equity amounted to S$2,69 billion and S$938 million respectively as per 30 September 2010. Kim Eng happens to be a leading stock broker in ASEAN, with outstanding dominance in five ASEAN’s key markets, including Singapore, Thailand, Indonesia and Philippines.

ThE transaction is subject to approval from, among others, Bank Negara Malaysia and the Monetary Authority of Singapore. Maybank Investment Bank and Nomura Singapore Ltd are joint financial advisors to Maybank on the transaction

Standard & Poor's Ratings Services said today that its ratings on Maybank. (Maybank; A-/Stable/A-2) are not affected by the bank's possible acquisition of Kim Eng Holdings Ltd.

The company consider the proposed acquisition to be in line with the bank's strategy of becoming a leading regional financial services provider in Southeast Asia. The transaction would combine Maybank's commercial banking operations with Kim Eng's stock broking presence in the region.

The proposed transaction could have a material impact on Maybank's capitalization, putting pressure on the bank's 'a-' stand-alone credit profile (SACP). If S&P lower the SACP by a notch, the counterparty credit rating would likely remain A- to reflect our expectation of extraordinary government support. In S&P view, Maybank is a highly important institution to Malaysia