Kim Eng rises to record after Maybank makes buyout bid: Update

Kim Eng Holdings, a Singaporean brokerage, surged to a record after Malayan Banking, Malaysia’s biggest lender, offered to buy the company for $1.79 billion to speed up expansion in Southeast Asia.

Shares of Kim Eng jumped 13% to $3.05 at the 5 p.m. close in Singapore trading, an all-time high, making it the best performer on Singapore’s stock exchange. Maybank, as the Kuala Lumpur-based company is known, slipped 0.1% to 9 ringgit, snapping a three-day gain.

 

Maybank agreed to buy a 44.6% stake in Kim Eng from Taiwan’s Yuanta Securities Asia Financial Services and Kim Eng Chairman Ronald Anthony Ooi Thean Yat at $3.10 a share, the companies said in separate statements yesterday. That’s a 37% premium to the stock’s average price over the month to yesterday. Maybank is required to make an offer for the rest of Kim Eng, they said.

 

The premium is “justified on grounds that it accelerates Maybank’s investment banking build-out in Asean as well as Kim Eng’s wider presence and strong position in the region,” David Chong, an analyst at RHB Research Institute Sdn., said in a report today. He kept his “outperform” rating on Maybank.

 

A takeover would give Maybank stock-broking and investment banking operations in Singapore, Thailand, Indonesia, the Philippines and Vietnam. The deal would be the largest in the last 12 months in the Asian finance, broking and banking industry, according to data compiled by Bloomberg.

 

Kim Eng, founded in 1972, has operations in 10 economies including Indonesia, Hong Kong, Thailand and the U.S. It is Singapore’s second-biggest securities company in terms of trading volume, according to its website.

 

Maybank has 1,750 branches and offices in 14 countries with about 40,000 staff and 18 million customers, according to the company’s website. The bank has an asset base of more than US$100 billion ($129.7 billion), it said.