Bank Lippo acquisition approved

Bank Lippo acquisition approved

The Jakarta Post, Jakarta

Shareholders of publicly listed PT Bank Lippo have approved the
acquisition of more than half of its shares by Khazanah Nasional,
a Malaysian government investment holding arm.

They approved the acquisition during an extraordinary meeting
on Friday in Jakarta.

Khazanah acquired Swissasia Global (SAG)'s 52.05 percent stake
in Bank Lippo for about Rp 3.3 trillion (about US$320 million),
or Rp 1,619.11 per share.

The price was slightly higher than the shares' book value. The
bank's shares were trading at Rp 1,530 per share on the Jakarta
Stock Exchange on Friday.

A Khazanah wholly owned unit, Amsterdam-based Santubong
Investments BV, conducted the acquisition, which is expected to
be finalized in October.

The shareholders also appointed new commissioners and
directors with two Khazanah officials joining the boards.

Jos Luhukay retained his position as president director, while
Khazanah senior vice president for investments, Lim Eng Khim, was
elected chief executive officer. Citibank director of consumer
banking Laurenthis Sulistiawati was chosen as director of
consumer banking and Thila Nadason of PriceWaterhouse Coopers
Indonesia as chief financial officer.

Khazanah director for investments Abdul Farid Alias and Bank
Niaga director for information technology Andi Mohammad Hatta
were elected as commissioners.

Jos explained that the finalization of the acquisition would
be completed in October after Bank Indonesia (BI) approved the
process and the election of new commissioners and directors.

"I'm optimistic that BI will approve the acquisition and the
lineup of new commissioners and directors," he said.

The deal comes amid reports of objections from certain parties
who cited a clause in the 2004 sale and purchase agreement that
SAG, which purchased Lippo's stake in February 2004, could not
resell its stake within the next two years, the so-called lock-up
period.

Jos rejected suggestions that Khazanah would follow SAG's move
in holding the bank's shares for just a short period of time.

"Khazanah is here for the long run. Its presence is expected
to accelerate the bank's growth and improve its performance. It
has come at the perfect time, just as we are aiming to become a
national bank in the next five years," he said, referring to BI's
plan to consolidate the number of banks and classify them as
international, national and specialist banks in 2010.

Under the plan, a national bank is required to have a
capitalization of between Rp 10 trillion and Rp 50 trillion,
while according to Bank Lippo's report for the first semester,
its capitalization stood at about Rp 2.5 trillion.

Jos also denied that the election of Andi as a commissioner
would lead to a merger between Bank Lippo and Bank Niaga.

"It's too early to say that. But Khazanah doesn't have to
merge all its companies that are operating in one country. At
present, it manages five to six financial institutions in
Malaysia," he said.

The issue was raised due to the fact that Khazanah has an
indirect stake in Bank Niaga. Data taken from Bank Niaga's
website shows that Commerce Asset-Holding Bhd., a 22 percent
stake of which is controlled by Khazanah, owns 61.56 percent of
the bank. (006)