Kuala Lumpur: CIMB Group Holdings Berhad (CIMB Group), RHB Capital Berhad (RHB Capital) and Malaysia Building Society Berhad (MBSB) announced that they have applied to Bank Negara Malaysia to seek the approval for the proposed three-way merger to form Bank Mega Islamic. The merger between the stock exchanges saw CIMB Group and RHB Capital on the exchange ratio of 1.38 (1 RHB Capital shares for 1.38 CIMB Group share) based on the benchmark price of RM7.27 per CIMB Group and RHB Capital RM10.03 per share, thus translating into a book ratio at 30 June 2014 from 1.70 times and 1.44 times for both parties.
CIMB Group shareholders will own 70 percent of CIMB-RHB Group (combined CIMB-RHB) and RHB Capital shareholders remained at 30 percent.
Acting Group Chief Executive of CIMB Group, Tengku Datuk Zafrul Tengku Abdul Aziz said, these measures will strengthen the position of CIMB among the leading banks in the Southeast Asian region and open opportunities for value creation for all shareholders of CIMB.
“We are very pleased to be able to reach this level and we can now move forward and try to find the necessary approvals for the implementation of this coalition,” he said yesterday.
Accordingly, the three institutions will combine to form the Mega Islamic Bank and it will be done at the price of RM2.82 per share. MBSB and MBSB shareholders will get the option of receiving cash or CIMB Islamic shares in return.
Mega Islamic Bank will remain a subsidiary of the joint venture between CIMB-RHB and MBSB.
All three parties are now moving towards the process as fair consideration and Sales Purchase Agreement (SPA) will be signed early next year. According to the SPA, approval regulators and shareholders will be sought and the deal is expected to be completed by 2016.