KUCHING: Analysts are strongly optimistic for Malaysian Building Society Bhd (MBSB) to be the listed vehicle for the Islamic banking operations of the CIMB Bank Bhd (CIMB), RHB Bank Bhd (RHB) and MBSB.
Maybank Investment Bank Bhd’s research division (Maybank IB Research) noted that, “while we have discussed a tripartite CIMB-RHB-MBSB merger, the alternative would be to first merge CIMB and RHB, and then to transfer the Islamic operations of the two banks to MBSB, to create a listed mega- Islamic bank.
“Our hypothetical scenario, assuming that CIMB Islamic Bank is priced at a price by book value of 1.7 times and RHB Islamic Bank at one time, while MBSB issues shares at 1.8 times to acquire both entities.
“This translates to an acquisition cost of RM9.7 billion and we estimate CIMB-RHB could end up with a 58 per cent stake in MBSB while employees provident fund (EPF)’s shareholding would dilute to 27 per cent from 65 per cent.”
The research house believe there is a trading angle to MBSB. Uncertainties now are pricing and structure of the Islamic banking entities merger.
If the analyst’s scenario does not pan out, MBSB shareholders would still either get bought out or get to exchange their shares for the largest financial institution in Malaysia.