Monday, June 13, 2011

How is Maybank or CIMB going to pay off RHBCAP's shareholders?

While I am in the camp that do not agree to either Maybank or CIMB acquiring RHB, as the purchase does not makes sense for either of the acquirer, it is probably going to happen anyway.

Can someone let me know where is the synergy, if the 2 largest Malaysian banks is (fight it out) to acquire a bank which is a result of a merger among DCB Bank, Kwong Yik and UMBC. Does Malaysia need such a large bank?

Anyway, as I do not hold any CIMB or Maybank shares, I just would like to ask 1 question - how will RHBCap shareholders be paid (since I have my money in EPF)? I do not want the shares of Maybank or CIMB please, as EPF already holds substantial stake in the 2 banks.

What I want is cash and see that EPF makes good use of the cash. Based on the latest market valuation of RHBCap, EPF's holding of RHB is valued at somewhere in between RM9.5 to RM10 billion.

Now the question is where is CIMB or Maybank going to find the RM21 billion or more to pay for the RHBCap stake in cash? My guess is that it is going to end up being a share swap deal and we holders of money in EPF will end up with more stakes in the 2 largest banks in Malaysia.

I am pro the selling of RHB to a foreign party but I know that is not going to happen.

Serious Investing!

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