Feb 06 2007
Based on the late news released by The Edge, it quoted a source as confirming the Kuwait Finance House ( KFH ) (Malaysia) Bhd (KFHMB)-led consortium has won the bid to acquire Utama Banking Group (KLSE : UBG, stock-code 6831) entire interest in Rashid Hussain Bhd (KLSE : RHB, stock-code 1309). Sources further said its proposed investment of over RM12 billion in RHB earned the UBG board’s approval at the latter’s meeting Feb 6 that lasted well into the night.
It is learnt that KFHMB will pay RM2.2 billion for UBG’s entire interest in RHB, including the irredeemable 
convertible unsecured loan stocks (ICULS) and warrants. Instead of leaving RHB, UBG had been offered, and had agreed to take up, a 20% stake in the consortium.
convertible unsecured loan stocks (ICULS) and warrants. Instead of leaving RHB, UBG had been offered, and had agreed to take up, a 20% stake in the consortium. 
Upon conversion of the ICULS and warrants, UBG’s equity interest in RHB would rise to about 60% from 32.8% now. Following this, the consortium will have to undertake a mandatory general offer in RHB. The consortium would be supportive of the Employees Provident Fund’s (EPF) proposed plan for a restricted offer for sale (ROS) of RHB Capital shares as long as it would serve to benefit all shareholders. It has also been reported that the consortium would commit to subscribe for UBG’s portion of the ROS, which will cost it more than RM1 billion. What can I say, KFH is just too cash-rich to let go of this deal.
In a statement earlier, the KFH-led consortium said its proposal for RHB was a “strategic, high-value and high-impact investment to create and base a mega Islamic bank out of Malaysia due to the considerable, sustainable positive spillover to the economy and people of Malaysia”.
From the start of the bidding, KFH was already seen as the winner with its’ financial muscle and the same “brother-hood” on setting up a giant Islamic financial institution vision. Selling it to KFH is the next best thing after government bail-out option is out of the question. Nevertheless it’s a good thing the debt-problem facing RHB is finally over which is good for minority shareholders – though I believe most of them will never recover their losses for those who bought in at above RM16.00 per share (many of them).
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February 6th, 2007 by financetwitter
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Comments
ever heard of buy on rumors, sell on news?
anyway since eon-capital received approval from central bank to bid for rhb (though the real reason is unknown), rhbcap & rhb might be open for further speculation …
regardless, with the generousity of kfh, rhb will be out of debt and the huge capital injection from kfh with intention to create world’s largest islamic bank should be viewed positively as a whole …
cheers …
Do you think Rhbcap jump further after one day suspended?