Gajah Surya to acquire 51.8% stake in BDNI

JAKARTA (JP): PT Gajah Surya Multi Finance of the Gajah Tunggal Group announced yesterday that it will acquire a 51.8 percent stake in publicly-listed PT Bank Dagang Nasional Indonesia (BDNI) to make it the group's flagship financial firm.

BDNI is also owned by the Gajah Tunggal Group.

Gajah Surya said in a statement that to finance the internal acquisition, priced between Rp 734.16 billion (US$311 million) and Rp 808.64 billion, it will issue 560.5 million shares through a limited offering, in which every two old shares are entitled to buy seven new shares at an indicative price of between Rp 1,000 and Rp 1,300 each.

The price of Gajah Surya shares steadily increased from Rp 1,150 on Monday to Rp 1,500 on Tuesday and to Rp 1,550 yesterday.

The proceeds from the planned rights issue are expected to reach between Rp 560 billion and Rp 728 billion.

The statement said that if necessary, the company will also raise a syndicated loan of up to Rp 250 billion to complete the financing.

The acquisition, however, is still subject to minority shareholders' approval at the next extraordinary shareholder meeting scheduled for Aug. 23.

Under capital market regulations, an internal acquisition is subject to independent shareholder approval because it contains conflicts of interest.

The company also said in its concise rights issue prospectus that the fixed acquisition cost will be determined one day before the extraordinary meeting.

Gajah Surya, established in 1982 as a leasing company, also operates in the areas of general and life insurance, insurance brokerage, securities brokerage, share registrar and venture capital, with total assets of Rp 779 billion.

"The acquisition of BDNI shares will make Gajah Surya one of the largest financial service companies in Indonesia," the statement said.

"The management has planned to make use of BDNI's nationwide extensive branches to sell a broad range of financial services to Indonesia's growing number of corporate and consumer clients."

BDNI, with total assets of Rp 14 trillion, currently operates 12 subsidiaries and affiliates, including Bank Dewa Rutji, PT DBS Securities and PT BDNI Reksa Dana. (alo)