Malaysia's Khazanah set to buy 52.05% stake in Lippo from SAG
The Jakarta Post, Jakarta
Claiming to have secured consent from the Ministry of Finance, Malaysia's Khazanah Nasional Bhd. has agreed to buy a majority stake in Bank Lippo from Swissasia Global (SAG) -- a consortium led by Swissasia Swissfirst Bank.
In a statement received on Sunday, the Malaysian government- owned investment firm has agreed to a conditional agreement to acquire SAG's 52.05 percent stake in Lippo for between Rp 3.18 trillion and Rp 3.30 trillion.
The proposed acquisition will be conducted through Khazanah's wholly owned unit Santubong Investments BV.
"Khazanah is committed to the long-term development of Indonesia and views this investment as an important milestone towards further strengthening the ties between Malaysia and Indonesia," the statement said.
Having an access to over 2.8 million customers and strong track record of customer service and innovation, Lippo will provide a sound platform to participate in the growth opportunities, it added.
The price amounts to between 2.5 and 2.6 times the book value of the country's ninth-largest lender by assets, however the final price will be determined after Lippo first-semester accounts are audited.
The proposed deal came amid reports of objections from certain elements who cited a clause in the 2004 sale and purchase agreement that states that SAG cannot re-sell its stake within the next two years, under the so-called lock-up period.
SAG purchased the 52.05 percent stake in Lippo in February 2004, meaning that it would not be allowed to sell the stake until early next year.
Khazanah claimed, however, that "SAG has obtained the consent of the Ministry of Finance to sell its entire shareholding prior to the expiry of the lockup period".
Still, Khazanah said that the planned acquisition remained the subject of all regulatory approvals including approvals from Bank Indonesia and the approval of Lippo's shareholders.
The above approvals and other conditions precedent to the Proposed Acquisition are expected to be fulfilled within the next three months.
Khazanah will also offer to buy the remaining Bank Lippo shares in the lender, upon the completion of the deal, the statement added.
Lippo at present boasts an extensive distribution network comprising 395 branches and 691 ATMs throughout the country.
Khazanah is the investment arm of the government of Malaysia entrusted to manage assets held by the Government and to undertake strategic investments.
Dow Jones reported that Khazanah already has a presence in Indonesia through its controlling 22 percent interest in Malaysia's second-largest financial group, Commerce Asset-Holding Bhd., which owns about 62 percent of Bank Niaga.