KUALA LUMPUR, Sept 4 Affin Holdings Bhd
, Malaysia's seventh-largest lender by assets, said on
Wednesday it won the final round of bidding for the right to buy
Hwang-DBS Malaysia Bhd's key businesses, beating rival
AMMB Holdings Bhd.
Banking sources said Affin's offer values Hwang-DBS'
businesses at 1.3 times price-to-book value, or about 1.27
billion ringgit ($386.43 million) based on Hwang-DBS' 977.4
million ringgit book value as of April 30, according to Reuters'
That would be in line with the average 1.3 times value paid
in past investment banking mergers and acquisitions involving
Malaysian banks dating to the year 2000. Affin itself did not
release any financial details of its offer.
The "exclusivity agreement" Affin announced it has entered
into with Hwang-DBS brings Affin a step closer to becoming
Malaysia's third-largest stockbroker with a market share of more
than 9 percent, just behind CIMB Investment Bank and K&N Kenanga
This latest agreement also follows the recent tie-up between
investment bank K&N Kenanga and ECM Libra Financial Group Bhd
, which saw the merged entity become the biggest
independent investment bank by sales and third-largest brokerage
by trading value.
The recent consolidation in the sector comes as Malaysian
authorities encourage bank mergers to create larger groups with
the financial muscle to grab market share in Southeast Asia,
whose ASEAN grouping plans to form a single economic zone by
The businesses that fall under the "exclusivity agreement"
include 100 percent interest in Hwang-DBS Investment Bank Bhd
and HDM Futures Sdn Bhd, 70 percent of Hwang Investment
Management Bhd and 49 percent of Asian Islamic Investment
Management Sdn Bhd, according to the stock exchange filing on
"Under the agreement, both parties will proceed to make
their respective applications to Bank Negara Malaysia," Affin
said. Bank Negara is the country's central bank.
Affin and AMMB, Malaysia's sixth-largest lender by assets,
were the final two bidders for Hwang-DBS businesses. Hwang-DBS,
the country's fourth-largest stockbroker by market share,
manages more than 18.1 billion ringgit worth of assets.
Affin counts Malaysia's armed forces fund Lembaga Tabung
Angkatan Tentera as its largest shareholder.
Affin shares rose 0.24 percent prior to the announcement,
while Hwang-DBS climbed 1.63 percent.
($1 = 3.2865 Malaysian ringgit)
(Reporting By Yantoultra Ngui, Niluksi Koswanage and Al-Zaquan
Amer Hamzah; Editing by Matt Driskill)