CORRECTED - CORRECTED-Malaysian pension fund may lead MBSB buyout -paper

(Corrects headline to remove extraneous letter in firm's name)

KUALA LUMPUR, June 21 (Reuters) - Malaysia's state pension fund may join hands with investors from the Middle East to buy out home loan provider Malaysia Building Society Bhd (MBSS.KL) (MBSB), a newspaper said on Saturday.

The Employees Provident Fund (EPF) is expected to bring in new shareholders for MBSB by launching a general offer for the firm, ridden with bad loans, the Star newspaper said, quoting an unidentified banking source.

The offer may price MBSB at two to three times its book value and give investors from Abu Dhabi a 30 percent stake, it said.

EPF, which has an asset base of about 312 billion ringgit ($96 billion), now holds a 53 percent stake in MBSB.

Under the buyout plan, new MBSB shareholders will clean up the company's balance sheet by setting up a fund to buy 1.45 billion ringgit worth of non-performing loans from MBSB.

MBSB's real estate portfolio will also be regrouped and, where possible, injected into a real estate investment trust, the paper said.

"MBSB will be asset light," it quoted the source as saying.

Shares of MBSB closed Friday up 16.1 percent at 1.59 ringgit. The stock has gained 50.6 percent over the last three months. (Reporting by Soo Ai Peng; Editing by Clarence Fernandez)