Friday, March 16, 2007

More Speculation on RHB Capital?

Saw this headlines posted on Business Times today.

  • Newbridge has eyes on RHBCap
    The US private equity firm wants to buy as much as 20 per cent of RHB Capital, the parent of RHB Bank, say bankers familiar with the matter
What the article is saying.. (added some comments in green italic)
  • Newbridge has eyes on RHBCap
    By Francis Fernandez
    bt@nstp.com.my

    March 16 2007

    NEWBRIDGE Capital Ltd, a US private equity firm, now has its eyes on banking group RHB Capital Bhd (RHBCap), bankers familiar with the matter said yesterday. (no more sources said? But hey 'bankers familiar with the matter' same as sources, no?)

    This comes after it received Bank Negara Malaysia's approval last month to start talks to buy 20 per cent of EON Capital Bhd (EONCap), a smaller lender, from DRB-HICOM Bhd.

    Newbridge has "expressed interest" to start talks with the Employees Provident Fund (EPF), a pension fund that is poised to control the RHB group.

    It wants to buy as much as 20 per cent of RHBCap, the parent of RHB Bank, the bankers said. (which bankers???? err... them ahlong also a banker, no?)

    Apart from Newbridge, Kuwait Finance House (KFH), owner of the biggest Islamic bank in Kuwait, is also interested to have a stake in RHBCap.

    EPF early this month outbid EONCap and KFH to take control of Rashid Hussain Bhd (RHB), the parent of RHBCap, by offering RM2.25 billion cash to buy Utama Banking Group Bhd's 32.8 per cent stake in RHB.

    It will then make an offer to buy the rest of the shares in RHB and RHBCap. It also wants to make RHB Bank, now a 70 per cent-owned subsidiary, a fully-owned unit of RHBCap.

    EPF has also said that it will sell up to 35 per cent of RHBCap to foreign partners that can help improve the banking group's performance.

    Many had suspected that Newbridge's interest in EONCap hinged on the lender gaining control of its bigger rival RHBCap.

    However, executives involved in talks with Newbridge on the sale told Business Times that talks are still going on. (Oooh.. now it is executives!! Which excutives? A executive is such a broadbased definition, no? Anyone can be an excutive. yes?)

    Last year, Newbridge made a failed attempt to acquire a quarter of AMMB Holdings Bhd, the country's fifth largest bank. It lost out to the Australia & New Zealand Banking Group Ltd, Australia's third largest lender.

    Newbridge is a unit of Texas Pacific group, a private equity firm, which said that it could devote up to US$10 billion (RM35 billion) for deals in Asia.

    The search for quality banking assets in Malaysia comes at a time when private equity firms are seeking cheap assets outside its traditional base in the US and Europe.

    Asian private equity funds commanded US$120 billion (RM421 billion) of total capital under management as of end-2005.

So my question is simple... if this Newbridge is really interested, surely it could have done better than having the press leak and run the story in such a manner. No?



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