Ometraco plans to acquire 51% stake in Bank Tiara

Ometraco plans to acquire 51% stake in Bank Tiara

JAKARTA (JP): The publicly-listed Ometraco Corporation plans to acquire a 51 percent stake in Bank Tiara Asia, a commercial bank also listed on the Jakarta and Surabaya stock exchanges.

Boyke Gozali said that the planned takeover deal will be worth around Rp 160.6 billion (US$72.7 million) or Rp 2,100 (90 U.S. cents) per share.

He said that the acquisition of the majority stake in Bank Tiara, which is also majority controlled by founders of Ometraco, is subject to approval from minority shareholders.

The proposed price of the planned transaction is still below Bank Tiara's stock price of Rp 2,175, quoted on Tuesday.

Boyke claimed that the acquisition price is reasonable enough as the real value of the bank's shares could achieve a range between Rp 3,000 and Rp 3,200.

Ometraco, which booked total assets of around Rp 1.3 trillion and net earnings of Rp 39 billion in 1994, operates in the production of consumer products, pharmaceuticals, poultry and animal feed and financial services.

The planned internal acquisition of Bank Tiara will be the latest series of business reorganizations within the Ometraco group.

Ometraco was listed on the Jakarta and Surabaya stock exchanges in 1992 as a leasing firm but it changed its operational status as a holding company following its listing by acquiring the majority stake of its six affiliated companies. Bank Tiara is one of Ometraco's affiliated firms which operate under different flags.

Boyke said that the takeover of Bank Tiara will significantly strengthen Ometraco Corporation's capital structure and its market capitalization by one and a half times.

Ometraco is now preparing a rights issue, a limited public offering, to finance the planned acquisition, he said, adding that the company would simultaneously issue warrants to make the rights share offering more attractive to existing shareholders. (hen)