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.

RHB Capital, OSK Deal To Create Malaysia's Largest Brokerage

28 May 2012 1

-- RHB Capital to buy OSK Holding's investment banking business in MYR1.95 Bln cash-and-shares deal -- Merged entity to be the largest brokerage in Malaysia with 15% market share -- Aims to earn at least 10% of its revenue from overseas (Adds deal details and background throughout) KUALA LUMPUR -The consolidation among Southeast Asian banks forced by competition and cheaper lending that squeezes profit margins was brought into sharp relief Monday when Malaysian lender RHB Capital Bhd. (1066.KU) said it will buy OSK Holdings Bhd.'s (5053.KU) investment banking arm for MYR1.95 billion ($620.2 million) in cash and shares. The deal will create the country's largest stock brokerage and investment bank by assets. It will have approximately 15% of Malaysia's brokerage business. The consolidation will help lower costs and create a company employing almost 4,000 people--none of whom will lose their jobs, RHB Capital and OSK said Monday. It will expand across Singapore, Vietnam, Thailand, Indonesia, Hong Kong, China and Cambodia with the intention of generating at least 10% of its annual revenue from overseas, Kellee Kam, group managing director of RHB Capital said at a news conference. He expects positive earnings per share after 18 months. RHB Capital said Monday it will pay MYR1.95 billion ($620.2 million)--MYR147.5 million in cash and 245 million new shares at MYR7.36 each--for OSK Investment. Separately, RHB Capital said it will pay MYR39.30 million cash for 20% of OSK Trustees Bhd., all of OSK Investment (Labuan) Ltd. and 59.95% of Finexasia.com Sdn. Bhd. This deal, which is expected to be completed in the October-December period, continues the recent consolidation of Southeast Asian banks. Top lender Malayan Banking Bhd. has been looking to expand in to Laos, Vietnam, Cambodia, Indonesia and Thailand after it acquired Kim Eng Group last year for $1.4 billion. Rival CIMB Group Holdings bought 60% of Bank of Commerce of the Philippines for MYR881 million and Royal Bank of Scotland Group PLC's (RBS.LN) cash equities and associated investment banking businesses in the region. Ebbing risk appetite from overseas investors because of the euro-zone debt crisis has also hurt the appeal of emerging-market shares. Credit Suisse advised RHB and Goldman Sachs was the investment banker to OSK.