HONG KONG/SINGAPORE (Reuters) - Carlyle Group and TPG Capital are in talks to launch a joint bid for a $1.5 billion stake in Malaysian lender RHB Capital, three sources with direct knowledge of the matter told Reuters on Thursday.
Abu Dhabi Commercial Bank owns the stake and has hired Goldman Sachs and Bank of America-Merrill Lynch to run the auction.
Carlyle and TPG have engaged an investment bank to advise them on the potential offer, said the sources, who declined to be named because the discussions were private.
No formal mandate has been given, and, like any auction, the consortium could advance with a bid or pull out after due diligence.
Carlyle and TPG were not immediately available for comment.
The auction has attracted other private equity firms, banking sources say, as the holding offers a chance to tap into Malaysia’s growing economy.
A joint bid is logical as it’s a big equity cheque for a buyout firm bidding on its own. Since bank lenders find it difficult to finance acquisitions of bank stakes because banks are already significantly leveraged, that potentially increases the size of the equity cheque.
Singapore’s DBS Group Holdings could also potentially look at the RHB stake, one source familiar with the deal said, though it was unclear how Malaysian authorities would react to the bid, given that Singapore state investor Temasek Holdings controls Malaysian lender Alliance Bank. “There are ways to get around that,” said the source.
DBS was not immediately available for comment.
Australia and New Zealand Banking Group Ltd, the nation’s fourth-biggest lender, is also a contender, one source with direct knowledge of the situation told Reuters.
ANZ already owns 24 percent of Malaysian lender AMMB.
“We are always looking at opportunities to advance our super-regional strategy, but we don’t comment on speculation,” an ANZ spokesman said.
The stake may make more sense to bank buyers, some sources say, as they could increase the acquisition value by cutting duplication and pushing their products through RHB Capital. However, the fact that they will not get a controlling stake may limit what they are prepared to pay.
Malaysia’s economy is forecast to grow by 5-6 percent in 2011, driving up demand for consumer loans and credit cards.
Additional reporting by Narayanan Somasundaram; Reporting by Stephen Aldred, Saeed Azhar and Denny Thomas; Editing by Muralikumar Anantharaman and Will Waterman