Danamon bidders urged to raise offers

The Jakarta Post, Jakarta

The Indonesian Bank Restructuring Agency (IBRA) expects the three bidders shortlisted for a majority stake in Bank Danamon to raise their bidding prices.

"The (preliminary) bids are not yet final. They will still need to discuss that further, so there is still a possibility for changes," IBRA deputy chairman for bank restructuring I Nyoman Sender told reporters on Friday.

He did not, however, say what price level the agency was expecting.

Some legislators earlier urged the agency to postpone the sale of the government's shares in publicly listed Bank Danamon due to the low prices offered by the bidders.

The three bidding consortia are the Asia Financial Indonesia consortium (consisting of Temasek Holdings of Singapore and the Deutsche Bank), the Bank Artha Graha consortium and the Bhakti Capital Indonesia consortium.

The three were deemed eligible by IBRA after they met the March 17 deadline to submit their official bids, ranging from Rp 1,015 to Rp 1,100 per share. The government is selling a controlling 51 percent stake in Bank Danamon, one of the country's largest banks.

Critics said that with around 2.5 billion shares on offer, even the highest offered price would only bring in some Rp 2.9 trillion in total proceeds.

One bidder that reportedly made an offer of Rp 1,700 per share for the Bank Danamon stake was disqualified by IBRA because it failed to submit its bid on time.

IBRA owns a 99.4 percent stake in Bank Danamon after the government injected bonds in the late 1990s to save the bank from going under during the banking crisis.

The agency is mandated to sell the bank to raise cash to help finance the state budget deficit. IBRA is targeted to raise Rp 18 trillion this year.

The three shortlisted bidders completed on Friday the due diligence process on Bank Danamon.

According to the schedule, the three have until April 21 to submit their final bids.

Sender said he had no knowledge as to what level the bidders might increase their bidding prices. "This is a business deal, these things are part of business strategy."