Bangkok Bank to buy Bank Permata; share price dips 2.48%

Thailand’s Bangkok Bank is set to buy an 89.12% stake in Indonesia’s Bank Permata for US$2.67 billion.

Thailand’s Bangkok Bank Public Company Limited announced on Thursday 12 December that it would acquire an 89.12% stake in Indonesia’s Bank Permata.

As part of the ‘conditional share purchase’, Bangkok Bank will buy over current owners Standard Chartered Bank and PT Astra International Tbk’s shares for an indicative amount of US$2.67 billion.

The transaction is being made at US$0.11 per share, representing a valuation that is 1.77 times of Permata’s book value.

It is expected to be completed before the end of 2020, following which Bangkok Bank would decide on whether to purchase the remaining 10.88% of equity.

Share price lowest in three years

Following the announcement, Bangkok Bank’s share price opened at 156 Thai Baht per share on Friday 13 December, 2.48% lower than its previous close.

This is the stock’s fifth consecutive day of price decline, and its lowest share price in three years, since hitting 153.60 Thai Baht in November 2016.

Bank Permata, on the other hand, opened at 1,310 Indonesian Rupiah per share, its highest share price in one month.

These price movements are typical in an acquisition deal, where the target company tends to see share price increase, while the buying party tends to experience a drop in stock value.

Practise trading CFDs on company stocks with an IG demo account now

Outlook for both parties

The acquisition, said Bangkok Bank Chairman Piti Sithi-Amnuai, is part of the company’s wider plans to strengthen its position in the region.

‘International expansion is our key strategy. Indonesia in particular is a key focus for us, as it is one of the fastest-growing major economies in Asia with highly attractive macroeconomic fundamentals, favourable demographics, and increasing ASEAN (Association of Southeast Asian Nations) regional integration,’ said Sithi-Amnuai.

The bank added in a press release that the deal is expected to grow its earnings per share and return on equity immediately post-completion, with capital position expected to remain robust following the completion of the Transaction.

Chartsiri Sophonpanich, President of Bangkok Bank, noted: “Based on our first-hand experience in Indonesia, we believe that the Indonesian banking sector is poised to continue delivering attractive growth while maintaining healthy margins.’

For Bank Permata, currently the twelfth largest bank in Indonesia by total assets, the acquisition by Bangkok Bank will allow it to tap on the latter’s expertise and resources in corporate and SME banking across Asia.


IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Updated
Change

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
China 300
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.