UPDATE 1-Indonesia's Bakrie & Brothers drops on rights issue

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JAKARTA, Jan 21 (Reuters) - Shares of Indonesia's PT Bakrie & Brothers Tbk BNBR.JK fell by nearly 9 percent at one point on Monday following news that the firm plans to raise 51.3 trillion rupiah ($5.43 billion) to buy stakes in three affiliates.

Bakrie & Brothers, controlled by the family of Aburizal Bakrie who is Indonesia's chief social welfare minister, said late on Friday that of the money raised, 40.1 trillion rupiah would come from issuing new shares.

The right issue would be the biggest in Indonesian history, topping the $3.6 billion raised by PT Bank Danamon Tbk BDMN.JK in early 1999, according to Thomson Financial data.

"It's definitely good for the market capitalisation of the bourse, but at around 40 trillion rupiah, it is too far fetched for the company," said Franco Sutedjowidjojo, head of research at Ciptadana Securities, noting the company only had an $800 million market capitalisation.

Bakrie & Brothers had said it planned to acquire a 35 percent stake in PT Bumi Resources Tbk BUMI.JK, Indonesia's largest coal producer, a 40 percent stake in oil and gas explorer PT Energi Mega Persada Tbk ENRG.JK, and 40 percent of developer PT Bakrieland Development Tbk ELTY.JK.

Shares of all those three companies fell on Monday with Bumi losing as much as 1.8 percent of its value, Bakrieland dropping by 3.5 percent and Energi fell 1.5 percent.

Shares in Bakrie & Brothers slid by nearly 9 percent to 255 rupiah at one point, before recovering to trade down 5.4 percent by midday. Trading in the shares had been suspended since Wednesday pending the company's announcement.

The Indonesia Stock Exchange index .JKSE was trading down around 1.4 percent by midday. ($1=9,443 rupiah) (Reporting by Harry Suhartono, editing by Ed Davies)