Aabar Investments to exit RHB Bank

  • Business
  • Tuesday, 18 Jun 2019

PETALING JAYA: Aabar Investments PJS is putting up its remaining block of shares in RHB Bank Bhd for sale, marking the Abu Dhabi-based fund’s exit from Malaysia’s fourth-largest lender by asset size.

Sources said Aabar is seeking to sell its entire 9.99% stake or 400.52 million shares in RHB Bank for as much as RM2.22bil.

The sale, to be arranged by CIMB Investment Bank via a book-building exercise, will be priced at a range of between RM5.43 and RM5.54 a share.

At the top range, the deal prices RHB Bank at 0.9 times its book value. Shares in RHB Bank were last traded yesterday at RM5.59.

“While the stake sale price would be a slight discount to RHB Bank’s current price, Aabar will not be exiting the bank at a loss.

“Aabar has been collecting dividends as a substantial shareholder – this would offset its holding cost,” the source said, adding that funds are expected to take up the block.

Aabar, which is an indirect subsidiary of Abu Dhabi sovereign wealth fund Mubadala Investment Co, first emerged as a substantial shareholder inRHBBank in2011 after it acquired a 24.9% stake in the bank from sister company Abu Dhabi Commercial Bank.

It was reported that Aabar paid RM10.80 a share, or 2.2 times book value, for the shares in RHB Bank. The stake was later diluted to 17.7% in 2016 because the fund did not take up the rights shares issued by RHB Bank.

The “floor price” was seen as one of the stumbling blocks to the proposed three-way merger between RHB Bank, CIMB GROUP HOLDINGS BHD and MALAYSIA BUILDING SOCIETY BHD three years ago.

It was widely reported that the fund was seeking a higher price of RM12 per share for its shares in RHB Bank. In recent years, Aabar has made it clear about its intention to exit its investment in RHB Bank, as it sees the stake as a non-core asset.

In August last year, it sold 120.3 million shares at RM5.12 per share, netting an estimated RM615.94mil.

Aabar’s stake came down to about 14.5% after the August disposal. In March this year, Aabar disposed of another 3% or 191 million shares in RHB Bank for RM1.05bil, also via a book-building exercise.

Now, with Aabar out, talks of possible merger deals involving RHB Bank could be revived. The Employees Provident Fund is the largest shareholder with 40.56% or 1.626 billion shares, followed by OSK HOLDINGS BHD with 10.13% or 406.171 million shares.

Aabar was formerly owned by the Abu Dhabi government investment vehicle, International Petroleum Investment Corp, and later taken over by Mubadala under a restructuring exercise in 2016.

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