Bt177-bn offer for BAY shares
Mitsubishi UFJ Financial Group, the major shareholder of Bank of Tokyo-Mitsubishi UFJ, has reached a deal to establish a full presence in the Thai banking industry by taking over Bank of Ayudhya for 560 billion yen or Bt177 billion.
“As a part of a strategy designed to further develop BTMU’s business in Asia, the investment in Krungsri aims to establish a full-fledged commercial banking platform in Asia,” the Japanese bank said in a statement, referring to the bank’s Thai name.
Japan is the biggest foreign investor here, which shows “potential for future growth and a track record of consistent economic growth…”
“Thailand has become an economic centre of Greater Mekong.”
A Thai banker who asked not to be named said it looked clear that the Japanese bank’s main focus would be regional – Asean.
Last December BTMU acquired 20 per cent of Vietnam Joint Stock Commercial Bank for Industry and Trade, one of the leading state-owned commercial banks in Vietnam. Earlier this year, it forged alliances with banks in Indonesia and Myanmar to support Japanese companies’ relocation.
A share tender agreement was signed with GE Capital International Holdings for GE’s 25.3-per-cent stake in BAY for Bt60 billion. Subject to regulatory approvals in Thailand, BTMU will launch a voluntary tender offer for a 75-per-cent stake, inclusive of GE’s holding. In the joint announcement by Nobuyuki Hirano, president of MUFG and BTMU, the Japanese bank will then “replace GE Capital as a major shareholder of Krungsri and partner with the Ratanarak Group on Krungsri’s next phase of development”.
It offers Bt39 for each BAY share at a slight premium to yesterday’s closing of Bt37. The tender offer is expected to start in November with completion in December.
In the meantime, BTMU will ensure it wins approvals or waivers from the Bank of Thailand and the Finance Ministry for the acquisition and an increase in the foreign shareholding limit, and for BAY to integrate its Bangkok branches’ business after the tender offer to conform with the central bank’s one presence policy.
Founded by the Ratanarak Group, the 68-year-old Thai bank succumbed to the financial crisis in 1997. GE Capital emerged as a major shareholder. It recently put its stake on sale to realise gains.
TMB will be the next local bank to welcome a new shareholder, as ING Group plans to sell its 31-per-cent interest for up to $2 billion.
