Bank Danamon not to merge with BCA: Anthony
JAKARTA (JP): Salim Group chairman Anthony Salim ruled out yesterday the possible merger between the newly acquired Bank Danamon with Bank Central Asia (BCA).
Anthony, the son of the business group's founder, Liem Sioe Liong, said the Rp 297.92 billion (US$84 million) transaction was purely for long-term investment.
"The aim of the acquisition was long-term investment. We agreed to buy part of Bank Danamon because we think the bank is good," he said.
Salim Group accepted an offer Friday to become one of the majority shareholders in Bank Danamon by buying a 19 percent stake in the bank, one of the country's largest private national banks.
The 19 percent stake, or about 425.6 million shares, will be bought at Rp 700 per share from Danamon International, with the transaction totaling Rp 297.92 billion.
Bank Danamon, which is listed on the Jakarta Stock Exchange, had Rp 26.3 trillion in assets as of September.
Danamon International, which currently holds a 48 percent stake in the bank, will also sell about 10 percent of its equity shares in Bank Danamon to Credit Suisse First Boston (CSFB). The transaction will further reduce its ownership in the bank to 19 percent.
Public shareholders currently own 52 percent of the bank.
Anthony said the transaction would create a strategic alliance between the Salim Group and Bank Danamon and would eventually benefit both parties.
"The strategic alliance is best for both parties and there is no need between Bank Central Asia and Bank Danamon to merge," he said.
Bank Danamon's chief commissioner Usman Admadjaja also said Danamon International sold the shares to the Salim Group because both had a long-established good relationship.
"We have a very good relationship with the Salim Group," he said.
He said both Danamon International and the Salim Group, which controls BCA, the country's largest private bank, had a substantial stake in another private bank, Bank DanaAsia.
Anthony denied speculation that the acquisition was made as compensation for the funds the Salim Group injected into Bank Danamon several months ago when the bank was hit by a massive withdrawal.
"No, we didn't inject any fresh funds into Bank Danamon. It's not true," he said.
Anthony said to acquire Danamon's shares, the Salim Group would establish a new company.
"So it's not BCA that will acquire the stake but a new company," he said.
A director of the Salim Group, Benny Santoso, said the new company was expected to begin operations by the end of this month or early next month.
He said the funds to finance the transaction would come from Salim Group shareholders. "We'll use funds from Oom Liem and Anthony Salim to purchase the shares," he said.
Usman said proceeds from the transaction would be used to strengthen Bank Danamon's financial structure.
"We'll deposit the proceeds from the transaction and use them to increase Bank Danamon's capital," he said.
Erick Varvel, country manager of CSFB -- which was also offered a 10 percent share in Bank Danamon from Danamon International -- was waiting a bit before signing a deal.
"We don't know what how much Danamon's shares will cost, but we'll make the transaction for our own investment," he said.
Bank Danamon's share price on the Jakarta Stock Exchange closed unchanged at Rp 625 yesterday with 74.17 million shares changing hands in the regular market. (das/aly)