Kiatnakin set for tender offer

The bank will file the offer for Phatra to the Securities and Exchange Commission and Stock Exchange of Thailand this quarter.
Chairman Supol Wattanavekin told the annual meeting that the bank expected to close the purchase in August and de-list Phatra by the end of the third quarter. The bank will offer 0.9135 share of itself for one Phatra share and sell its stakes in Kiatnakin Securities and Kiatnakin Fund Management to Phatra.
To proceed with the transaction, |the bank will raise its registered |capital from Bt6.6 billion to Bt8.52 billion by offering 192.11 million new shares in a private placement at Bt32.20 each.
The share swap will not impact return on equity, but business growth might not be significant this or next year because the focus is on combining the business platforms of two groups under the new name of Kiatnakin-Phatra Financial Group.
Kiatnakin Bank expects to reap full dividends from the merger when the Asean Economic Community becomes effective because Phatra has expertise in investment banking and securities brokerage. This can strengthen its role as a financial adviser on transactions for customers in Asean. The bank expects to earn higher fee income from investment banking and securities brokerage.
Fee income right now might not be much because its portfolio is mainly full of instalment loans and non-performing assets, but fee income will be sharply increased after the merger, Supol said.
Asia Plus Securities said Kiatnakin Bank’s profit would return to the growth mode this quarter after the flood dampened its performance.
The bank’s first-quarter net profit dropped to Bt577 million from Bt683 million in the fourth quarter of last year and Bt605 million in the first quarter of 2011.
The brokerage said the bank should show better results in the second half of this year after the merger helps boost fee income.