Thailand's Bangkok Bank PCL agreed to buy an 89.12% stake in Indonesia's PT Bank Permata Tbk from Standard Chartered Bank and PT Astra International Tbk for an estimated 37.431 trillion Indonesian rupiah, a move that would further strengthen its position as a regional player in Southeast Asia.
Standard Chartered Bank and Astra Internation each own a 44.56% stake in Bank Permata, the 12th largest bank in Indonesia by total assets.
The proposed transaction will be effected on the basis of an agreed valuation of a 1.77 times multiple of Bank Permata's book value, subject to certain adjustments, the Thai lender said Dec. 12. It implies, on the basis of Bank Permata's book value as of Sept. 30, an indicative purchase price of 1,498 Indonesian rupiah per share and an indicative transaction value of 37.431 trillion rupiah for an 89.12% stake and 42.001 trillion rupiah for a 100.0% stake in the bank.
Subject to shareholder and regulatory approvals, the transaction is expected to close within 2020.
Bangkok Bank said it expects to launch a mandatory tender offer for the remaining 10.88% stake in Bank Permata following the completion of the proposed acquisition.
Standard Chartered PLC said the sale of its stake in Bank Permata is a key part of its capital optimization plans and would allow it to focus on its banking presence through Standard Chartered Bank Indonesia for its ongoing operations and future growth in the country.
Upon completion of the transaction, StanChart said it would record an estimated gain of about US$500 million. In addition, the transaction would increase the group's common equity tier 1 capital by approximately US$100 million, reduce risk-weighted assets by around US$9.5 billion and increase its common equity tier 1 capital ratio by around 50 basis points.
Morgan Stanley is advising Bangkok Bank for the transaction.
The announcement came after media reports said Bangkok Bank was competing with rival suitors, including Sumitomo Mitsui Financial Group Inc., for the majority stake in the Indonesian bank.
As of Dec. 11, US$1 as equivalent to 14,035 Indonesian rupiah.