* ING bought the stake in 2007
* Thai political unrest has slowed down negotiations
* TMB shares up 1.8 pct
By Denny Thomas
HONG KONG, Feb 6 Thai lender Thanachart Bank has
held discussions with ING Groep about buying the Dutch
financial services company's 31 percent stake in TMB Bank Pcl
, although the talks are no longer continuing, a person
familiar with the matter said.
The talks come after ING failed to interest foreign banks in
its TMB stake last year. A sale to a domestic lender is likely
to meet fewer regulatory obstacles in a country where foreign
ownership above 49 percent requires government approval, people
familiar with the process have said.
ING's 31 percent holding in Thailand's seventh-largest
lender is valued at about $942 million based on Wednesday's
closing price. The European firm has been exiting its non-core
businesses as part of a wider asset sale programme to pay down
the state aid it received during the global financial crisis.
Thanachart Bank, which is 49 percent owned by Canada's Bank
of Nova Scotia, has been interested in acquiring the
stake for some time but Thailand's political stalemate has
slowed negotiations, the person added.
Thai protesters have been trying to topple Prime Minister
Yingluck Shinawatra since November, prompting the government to
announce a state of emergency ahead of Sunday's vote that was
boycotted by the main opposition party.
On Wednesday, Thailand's central bank warned of
"substantially increased" risk to economic growth after the
disrupted general election did nothing to restore stability.
For detailed story package on Thai unrest:.
A Singapore-based ING spokesman declined comment, while
Thanachart Bank was not immediately available to comment.
In early Thursday trade, TMB Bank shares were up 1.8
percent, while the benchmark Thai index was 0.5 percent
Differences over price and lack of control thwarted ING's
previous attempts to sell the TMB Bank stake, sources previously
told Reuters. Complicating matters, Thailand's finance ministry
holds 26.1 percent of TMB having bailed the bank out after
Australia and New Zealand Banking Group pulled out of a
deal in 2003 to buy a stake.
While a buyer of ING's stake would prefer to acquire the
government stake to get eventual control of TMB, it was unclear
whether the Thai government and ING had the same price
expectations, people familiar with talks said.
TMB Bank, formally known as Thai Military Bank, was
previously owned by the army and the son of former prime
minister Thaksin Shinawatra.
The army now owns just 1.4 percent but continues to have one
representative on the board.
ING bought its stake in 2007 for 460 million euros, and owns
25.2 percent directly and 5.84 percent though non-voting
depository receipts. In 2012, ING forfeited its option to buy an
additional 5 percent.
Finance Asia magazine first reported Thanachart's interest
in buying ING's sake.