Oversea-Chinese Banking Corp. (OCBC) and CIMB Group Holdings Bhd. (CIMB) are considering bidding for General Electric Co.’s $1.6 billion stake in Thailand’s Bank of Ayudhya Pcl (BAY), said three people with knowledge of the matter.
The two lenders have signed non-disclosure agreements that allow them to examine in closer detail the accounts of the Bangkok-based bank, the people said, asking not to be identified as the process is private. GE (GE:US)’s finance unit owns 25 percent of Thailand’s fifth-largest lender.
GE sold 7.6 percent of Bank of Ayudhya to institutional investors last month, and said at the time that it is reviewing “strategic” options for its remaining holding. GE won’t sell any more shares through the market for 180 days unless it relates to a “strategic sale,” Bank of Ayudhya said Sept. 26.
“There has been significant interest from investors in the bank arising from its strong business performance so we undertook the block sale,” GE Capital said in an e-mailed statement today in response to questions from Bloomberg News. The company “continues to review strategic options for its remaining interest in BAY, and we cannot comment on market speculation about any external interest in this.”
Malayan Banking Bhd. (MAY), Malaysia’s biggest lender, would be interested in one-on-one discussions with GE about its Bank of Ayudhya stake, though doesn’t want to compete with other bidders, one person familiar with the matter said. Maybank hasn’t signed a non-disclosure agreement, this person said.
Maybank today said it is seeking about 2.64 billion ringgit ($865 million) in a private placement of shares, to strengthen its capital and “support growth objectives.”
Bank of Ayudhya rose 2.4 percent to 32.25 baht today, its highest in more than a week. OCBC was unchanged while CIMB gained 0.9 percent and Maybank fell 1 percent.
Koh Ching Ching, a Singapore-based spokeswoman for OCBC, declined to comment, as did officials at CIMB and Maybank.
OCBC, Southeast Asia’s second-largest lender, is vying with Singapore-based rivals to expand into other parts of Asia. The company generated 82 percent of its pretax income from Singapore and Malaysia in the second quarter, data compiled by Bloomberg show. OCBC said in August it expects a $1.15 billion gain from the sale of stakes in Fraser and Neave Ltd. (FNN) and Asia Pacific Breweries Ltd. (APB)
Kuala Lumpur-based CIMB, which already owns a bank in Thailand called CIMB Thai Bank Pcl. (CIMBT), is also seeking to extend its regional reach after being the nation’s top underwriter for equity and rights offerings in the past three years, according to data compiled by Bloomberg. CIMB agreed in April to buy most of Royal Bank of Scotland Group Plc’s Asia-Pacific investment banking operations.
Formed in 1945 and listed on the local stock exchange in 1977, Bank of Ayudhya has counted GE as its top shareholder since 2007, when the Fairfield, Connecticut-based company acquired a 29 percent stake, data compiled by Bloomberg show. The U.S. firm boosted its stake to 33 percent later that year.
That investment preceded at least eight takeovers by the Thai bank, including purchases of businesses from GE, American International Group Inc. (AIG:US) and HSBC Holdings Plc (HSBA), the data show. Those deals turned Bank of Ayudhya into Thailand’s top or second-ranked provider of credit cards, car loans and personal finance, bank filings show.
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