| KUALA LUMPUR
KUALA LUMPUR Aug 1 Malaysia's BIMB Holdings Bhd
will pay $884 million to gain full control of Bank
Islam, the country's oldest and largest standalone Islamic bank,
in a deal that will help it expand in a rapidly growing sector.
Islamic finance in Malaysia, which has seen regulatory
reforms boost its share of the country's total banking assets to
more than 20 percent, has seen major consolidation as banks seek
to manage operational costs and win bigger deals.
BIMB, which currently owns 49 percent of Bank Islam, will
pay for a 30.5 percent stake from a unit of Dubai Group for $550
Dubai Group, the financial services arm of ruler Sheikh
Mohammed bin Rashid al-Maktoum's Dubai Holding Llc,
is mired in serious financial trouble with debts said to exceed
$10 billion and its assets worth only a fraction of that
BIMB will acquire the remaining 18.5 percent from Tabung
Haji, a domestic pilgrim fund and BIMB's biggest stakeholder,
for $334.6 million.
It will pay for the acquisitions through a renounceable
rights issue of 1.5 billion ringgit and a 10-year Islamic bond
of 1.5 billion ringgit.
The acquisitions are subject to approval by regulators and
Negotiations between Dubai Group and BIMB Holdings, which
began in Oct. 2012, had been granted two extensions by
Malaysia's central bank.
Dubai Group holds a global portfolio which includes an
interest in Oman's Bank Muscat and Greek investment
company Marfin Investment Group.
(Additional reporting by Yantoultra Ngui; Editing by Edwina