RHB Capital: Shareholders OK Share Issuance At MYR7.36/Shr For OSK Investment Bank Acquisition

30 Aug 2012

KUALA LUMPUR--Malaysia's RHB Capital Bhd. (1066.KU) said Thursday it was approved by its shareholders to issue 245 million shares to part-finance the 1.95 billion ringgit ($623.6 million) acquisition of OSK Holdings Bhd.'s (5053.KU) investment banking business. The shares will be issued at MYR7.36 apiece, taking into consideration RHB Capital's five-day volume weighted average market price of MYR7.42 up to Sept. 28, 2011--before it informed the country's central bank of its plan--after adjusting for dividends, the lender said in a statement. "The transaction is expected to be completed in the fourth quarter of 2012 upon the receipt of all necessary approvals," RHB Capital added. The share issuance will raise MYR1.80 billion for the proposed acquisition of OSK Investment Bank Bhd. and the remaining MYR147.5 million of the deal price will be paid in cash. OSK Holdings will become RHB Capital's third largest shareholder with a 9.88% stake once the deal is completed. The deal implies a 1.77 times multiple on OSK Investment Bank's book value of MYR1.10 billion as of Sept. 30 and represents 18.9 times its normalized earnings for the past 12 months after adjusting for one-time costs.