'Khazanah may agree if price for CIMB stake is right'

KUALA LUMPUR: If the price is right, Khazanah Holdings Bhd may just say "yes" to RHB Capital Bhd's (RHBCap) offer for the former's stake in CIMB Bank, banking analysts said yesterday.


However, some were quick to ask whether such offer is really in the works, while a few others wondered if a merger between the two banks is being strongly recommended by "the powers that be".

Asked if Khazanah is willing to sell off its stake in CIMB, its senior vice-president for communications Mohd Asuki Abas, when contacted yesterday, could only say: "We do not comment on speculations".

By that, he was referring to an online article yesterday stating that RHBCap's cash bid for the 29 per cent stake may just make Khazanah RM20 billion richer, if the deal takes place.

Most of the analyts contacted by Business Times yesterday agreed that CIMB may be a valuable asset for Khazanah but "it will all boil down to the price".

They said for a good price, it may not be wise for Khazanah to turn it down as the money could be used for other investments.

"Everything has a price. Khazanah's stake (in CIMB) is huge. But if they (Khazanah) can make good profit from the stake disposal, they may just agree and make their exit," said one analyst.

However, she wondered if it really makes sense to merge the two banks simply for the sake of industry consolidation.

"Is it really going to create that much value or will we see redundancy, overlapping, etcetera," she said.

Another analyst said he has been rather sceptical about the idea of a merger between RHB and either Maybank or CIMB initially and was not surprised when news got out that both banks had aborted their respective plans to buy over RHB.

"And now this comes up. It is like the powers that be are saying RHB must be merged one way or another. So I think Khazanah will give up CIMB," he said.

He added that with the government's recent statements on plans to divest its stake in government-linked companies (GLCs), it will be no surprise if Khazanah agrees to this speculated deal.

However, one analyst said it is quite absurd for Khazanah to lose its investment in CIMB because there is still a lot of future growth for the country's second largest lender.

"Why kill the hen that lays the golden eggs?" he asked.

Khazanah is the government's investment holding arm , entrusted to hold and manage the commercial assets of the government and to undertake strategic investments. Beside CIMB, it has substantial stakes in companies involved in various sectors, which include PLUS Expressways, Pantai Holdings Bhd, the UEM group, Malaysia Airlines and Proton Holdings Bhd.