EPF finalizing steps to let go of RHB to KFH

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Aug 16 2007
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This is not something new but rather to re-confirm the market’s expectation of the next subsequent steps to be taken by EPF (Employees Provident Fund) after it successfully or forcefully acquired Rashid Hussain Bhd (KLSE: RHB, stock-code 1309) of which its jewel in the form of RHB Bank attracted numerous players, both local and abroad.

As discussed earlier, any Middle-East organizations would have advantage over other foreigners in acquiring a majority stake not only in financial institution but other energy-related production company in Malaysia. Today, just five months after Utama RHB KFH EPF UBG Central BankBanking Group (KLSE: UBG, stock-code 6831) agreed to let go of its 32.6% to EPF despite higher offer from EON Capital Berhad (KLSE: EONCAP, stock-code 5266), EPF announced that its new wholly owned RHB Bank unit would start talks to sell its branches, assets and liabilities to Islamic bank Kuwait Finance House (KFH).

What will be the most interesting event to watch would be the potential selling price of the banking to Kuwait Finance House. EPF paid RM1.80 per share for RHB and RM4.80 per share for RHB Capital (which holds the license of the banking arm) from UBG.

Another thing to watch – who will be the second partner to join in the badwagon since EPF has said it wants at least two partners to help build value in RHB, with their contribution either in strategy, Islamic banking, financial strength or risk management. Could the second partner be CIMB Bank, an investment bank of Bumiputra-Commerce Holdings Berhad (KLSE: COMMERZ, stock-code 1023)?

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