Salim cancels plan to buy Danamon stake

Salim cancels plan to buy Danamon stake

JAKARTA (JP): Salim Group, the country's largest business
conglomerate, and U.S. firm Credit Suisse First Boston (CSFB)
announced Monday they had abandoned plans to buy a stake in
publicly listed Bank Danamon.

The Salim Group and CSFB said in a joint media statement that
the deal was canceled because of "recent developments" involving
Bank Danamon.

The bank is among seven trouble-stricken banks whose
managements have been taken over by the Indonesian Bank
Restructuring Agency (IBRA).

"The Salim Group and CSFB today jointly announce that, to
date, due to the recent developments of Bank Danamon, the
proposed acquisition of a stake in Bank Danamon which has been
under review since a memorandum of understanding dated Nov. 17,
1997 between PT Danamon International and the Salim Group, has
not proceeded," the statement, signed by Phiong Philipus and
Simon Subrata, said.

According to the memorandum of understanding, Salim Group
planned to purchase a 19 percent stake in Bank Danamon and CSFB a
further 10 percent at a price of Rp 700 per share.

Salim Group's chairman Anthony Salim, who is also the son of
tycoon Liem Sioe Liong, said at the time that the transaction
would create a strategic alliance between the Salim Group's
banking division and Bank Danamon and would eventually benefit
both parties.

Erick Varvel, the manager of CSFB in Indonesia, added that the
10 percent transaction would be a long-term investment for the
company.

However, the performance of Bank Danamon has been
deteriorating since then and it has been kept afloat by Bank
Indonesia's liquidity credits.

Management of the Jakarta Stock Exchange suspended trading of
Bank Danamon's shares on the exchange yesterday before it resumed
in the afternoon.

The bank's share price shed Rp 125 to close at Rp 225 Monday
on a total turnover of 31.79 million shares on the regular
market. (aly)