BIMB Holdings' acquisition of Bank Islam scheduled for December following shareholders’ approval - IFN

BIMB Holdings' acquisition of Bank Islam scheduled for December following shareholders’ approval

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MALAYSIA: The shareholders of BIMB Holdings have approved the proposed acquisition of a 49% stake in Bank Islam for a total of RM2.79 billion (US$884.6 million). During BIMB Holdings’ extraordinary general meeting yesterday, its shareholders came to a resolution that the purchase of Dubai Financial Group’s 30.47% stake in Bank Islam will be bought for US$550 million, while the remaining 18.53% held by Lembaga Tabung Haji will be secured through a cash consideration of RM1.05 billion (US$334.6 million). Commenting on the deal, Johan Abdullah, CEO of BIMB Holdings, said: “This is the last hurdle. We will then fix the book-closing date and fix the price for rights issue. We are looking at completing the entire exercise in the third week of December.” Upon completion, the earnings and profit contributions from the bank will increase from the present 85% to 90%. He further explained that the acquisition will help leverage on the growth of Bank Islam in its pursuit of group-wide consolidation and strategic coherence. In line with their objectives, the company also resolved a 426.71 million renounceable rights issue at RM3.80 (US$1.20) per share, together with corresponding free detachable warrants to raise RM1.62 billion (US$512.84 million). BIMB Holdings has also proposed to issue a 10-year Sukuk worth up to RM2.2 billion (US$697.81 million) in the event that the final rights issue share is lower than the desired value.