Malaysia's biggest lender, Maybank's, proposed $2.7 billion bid for Bank Internasional Indonesia (BII) is set to collapse after Indonesia again rejected Maybank's request to be exempted from a new take-over rule.
The new rule would require Maybank to cut its stake by 20 percent in two years, and unless the Indonesian market regulator changes its view, the deal with shareholders of Indonesia's sixth largest bank will lapse by September 26, Maybank said in a statement on Monday.
By 0700 GMT, shares in Maybank rose 0.7 percent to 7.75 ringitt, outperforming a 1.4 percent drop in the benchmark index as Maybank's purchase had been viewed as too costly by investors. "Most people are not very happy with the deal in the first place," said a dealer from a local brokerage. "If it gets cancelled, it is positive news for Maybank," he added.
Indonesia's capital markets regulator, Bapepam, had rejected Maybank's appeal, saying a waiver to the rule, which took effect in July, would create "a negative precedent to the newly introduced regulation" and "undermine the credibility of Bapepam's regulatory function."
State-controlled Maybank rattled investors in March when it unveiled a deal to buy a 56 percent stake in BII from Singapore state investor Temasek and South Korea's Kookmin Bank. Maybank had previously been criticised by investors for expanding too slowly outside its home market.
The deal priced BII at about 4.6 times book value, double Maybank's 2.3 and Indonesia's No 1 Bank Mandiri 1.98 times book value. But it hit a snag in July when Malaysia's central bank blocked the deal on concerns the new Indonesian take-over rules could lead to material losses for Maybank.