Lacklustre share price performance

remains,” said the official.

Three months ago, CIMB, RHB Cap and MBSB had entered into proposed merger talks. Bank Negara consented to the negotiations being exclusive to the three parties for 90 days and it will remain so only if there is a formal submission on the merger to the central bank.

“It would be unthinkable for CIMB not to submit a proposal because the exclusivity will be lifted. It would allow other banks to join the fray,” said the official.

Analysts said that based on the lacklustre share price performance of all the banks, it would appear that there is no concrete arrangement in place as yet.

While CIMB and MBSB closed unchanged at RM6.98 and RM2.42, respectively, RHB Cap was down three sen to RM8.67.

“I am not too upbeat on the deal, and think it will take a while before the structure is decided, or which bank does the taking over,” said one banking analyst.

He added that if CIMB were to take over RHB Cap, then valuations would hinder the deal because of Aabar Investments PJSC’s high investment cost in RHB Cap.

Aabar is owned by Abu Dhabi’s sovereign wealth fund. Aabar had bought its 21.2% stake in RHB Cap from Abu Dhabi Commercial Bank PJSC (ADCB) for RM10.80 a share in 2011. At RM8.67, RHB Cap is 25% below Aabar’s purchase price.

However, it should be noted that both Aabar and ADCB are majority-owned by the Abu Dhabi government, and hence, it was seen as a transaction between two friendly parties.

The Employees Provident Fund (EPF) is a key decision-maker in the deal because it has 41.5% in RHB Cap, 64.6% in MBSB and 14.6% in CIMB.

The EPF had written to the boards of RHB Cap and MBSB requesting that the companies seek a waiver from Bursa Malaysia to ensure the pension fund is allowed to vote in the transaction, StarBiz reported on Sept 5.

It has been learnt that Aabar is resisting the move to allow the EPF to vote.

In a report on CIMB, KAF Research said the synergies seen were mainly on the cost side, and believed the obvious areas were branch rationalisation, information technology and manpower.