KUALA LUMPUR: Khazanah Nasional Bhd is seeking to buy General Electric's (GE) US$1.8bil (RM5.61bil) stake in Bank of Ayudhya, sources said, pitting it against Japanese banking giant Mitsubishi UFJ Financial Group (MUFG).
Khazanah's bid for GE's 25.3% stake came as a surprise, the sources said, declining to be identified as the information was not public.
The proposed acquisition would be the largest purchase of an overseas banking asset by Khazanah, as it played catch-up with Singapore state investor Temasek Holdings Pvt Ltd.
Khazanah currently manages a portfolio that is just a quarter of the US$158bil (RM493.1bil) of assets held by its neighbouring rival.
Khazanah had in the past shied away from taking large banking stakes overseas, focusing on healthcare assets in Singapore and Turkey as well as real estate deals. The bid for GE's stake would mark a shift in Khazanah's strategy.
A successful acquisition of the stake in Bank of Ayudhya would bring Khazanah closer to Temasek in terms of investment approaches. The Singapore state investor already owns sizeable shares in Standard Chartered Plc, China Construction Bank Corp and Indonesia's Bank Danamon.
The Malaysian state investor is acquiring assets in neighbouring emerging markets, as the outlook for South-East Asian economies remains resilient in the face of global economic uncertainty.
Some analysts said Thailand was witnessing its best investment cycle in 20 years.
Bank of Ayudhya, which has a market value of nearly US$7bil (RM21.8bil), is the leader in the Thai retail and consumer lending sector. It is also Thailand's fifth largest lender.
GE is selling its remaining 25.3% stake in Bank of Ayudhya as it divests non-core assets across the world.
Officials from Khazanah and GE declined to comment.
The Malaysian state investor is also picking up insurance assets.
Khazanah, which owns a nearly 30% stake in Malaysia's second biggest bank CIMB GROUP HOLDINGS BHD, recently teamed up with Sun Life Financial Inc to buy a 98% stake in an insurance joint venture between CIMB and Aviva Plc.
This week, Khazanah made a preliminary bid to acquire a US$500mil (RM1.56bil) stake in unlisted Thai Life Insurance Co Ltd.
GE was trying to finalise a preferred bidder for the Bank of Ayudhya stake soon, but the deal was facing regulatory bottlenecks, the sources said.
Bank of Ayudhya's sale process began late last year with the appointment of Morgan Stanley as a sell-side adviser.
GE bought a stake of about 33% in Bank of Ayudhya in 2007 for 22.3 billion baht, or US$626mil based on the exchange rate at the time.
In September, GE sold a 7.6% stake in the Thai bank, raising about US$466mil (RM1.45bil). - Reuters