Global players courting RHB

By B.K. SIDHU

PETALING JAYA: Several financial institutions are being bandied about as potential strategic partners for the RHB group. This follows the approvals from Bank Negara and Finance Ministry for the Employees Provident Fund (EPF) to buy Utama Banking Group Bhd's (UBG) 32.4% stake in Rashid Hussain Bhd (RHB). 

The interested parties are said to include Japan’s Nomura, Royal Bank of Scotland, Barclays, Bank of Nova Scotia and Kuwait Finance House (M) Bhd (KFH). 

Nomura is said to have approached EPF about a strategic stake in RHB after the fund won its bid for the group early this month. It is also learnt that Royal Bank of Scotland and Barclays made a similar move last week, while the Bank of Nova Scotia had expressed its interest much earlier. 

And KFH has said it is keen on RHB’s Islamic banking assets. 

A report in London's Financial Times said US private equity fund Texas Pacific Group had set its sights on a stake in a Malaysian bank. But it is unclear if the target is RHB. 

Royal Bank of Scotland and Barclays declined to comment, according to FT. 

Last week, EPF chief executive officer Datuk Azlan Zainol said “many parties have shown interest” and that the fund was open to having financial institutions, banks or even private equity firms as strategic partners for RHB. 

On March 7, EPF beat KFH and EON Capital Bhd to the RHB stake. 

It agreed to pay RM2.25bil for the 32.4% stake. Adding that to the 29% it already owns, EPF would end up with 61% of RHB, triggering a mandatory general offer for the rest of the shares it does not own in RHB and RHB Capital Bhd. 

The fund is paying RM1.80 for each RHB share and RM4.80 for every RHB Capital stock. The entire deal – including the purchase of stakes in other RHB units – would cost the fund RM10bil. 

An EPF statement said yesterday it expected to complete the entire exercise, including the general offer, by July. After that, the fund would sell about 35% to 40% equity interest in RHB to strategic investors. This would help EPF recoup some of its investments in RHB. 

Currently, EPF appears to have many options in terms of strategic partners for RHB but what is important is that the strategic investors must have good global standing, which would give RHB the much needed boost to operate beyond its shores. 

Zainol said in the statement that with the approvals, EPF was able to protect its investment in RHB – made in 1997 – and allow the fund to continue its investments with a view to profitability.