Salim acquires significant stake in Bank Danamon
JAKARTA (JP): The Salim Group, the country's largest business conglomerate, has signed an agreement to acquire a significant stake in publicly listed Bank Danamon.
Danamon commissioner Jusuf Arbianto Tjondrolukito said the acquisition agreement was signed here yesterday by Danamon president Usman Admadjaja, Salim chief executive officer Anthony Salim, and Stephen Stonefield of Credit Suisse First Boston, Salim's financial advisor.
"The final deal is scheduled to be inked next week," Jusuf told The Jakarta Post.
Bank Danamon, the country's second largest private bank after Bank Central Asia (BCA), is 52 percent owned by public shareholders and 48 percent by PT Danamon International, which is controlled by the Admadjaja family.
"Danamon International and Salim have agreed to develop a strategic alliance by becoming majority shareholders with equal ownership in the bank," Jusuf said.
"And I believe the alliance can benefit both of us," he added.
He said Credit Suisse, a leading global corporate and investment banking firm, had also agreed to buy a significant claim stake in Bank Danamon.
An informed source said Salim and Danamon International would control the bank with 19 percent each, while Credit Suisse would have 10 percent.
The statement from the bank said Credit Suisse was evaluating a significant equity investment by Salim in the bank through its international equity fund.
It said the bank's board of commissioners would be strengthened by the addition of a new member from Salim who would be proposed at an upcoming extraordinary shareholders meeting.
Jusuf said Ninie Admadjaja, Usman's daughter, would remain as the bank's president and Usman Admadjaja as the bank's chief commissioner.
"There will only be an additional commissioner coming from Salim," he said
News about Salim's plan to acquire a stake in Danamon first circulated in the Jakarta Stock Market Thursday.
The news drove Danamon's stock price up 37 percent in a single day to Rp 650 from Rp 475, which prompted management at the exchange to suspend trading of Danamon stocks.
Trading on Danamon resumed yesterday. Danamon closed lower at Rp 625.
The entrance of Salim into Danamon would make Salim's clout in the banking industry stronger as it also controls BCA.
Danamon, which operates over 800 automated teller machines and more than 740 branches nationwide, booked total assets of Rp 24.1 trillion (US$7.08 billion) as of last June and collected Rp 19.7 trillion in third-party funds.
Danamon reported an unaudited Rp 154 billion pretax profit for the first half of this year. The bank booked Rp 281.2 billion in net profit in 1996, up 57 percent over the previous year. (icn/rid)