Public Bank managing director and chief executive officer Tan Sri Dr. Tay Ah Lek (left) and Teh Li Shian Diona, the youngest daughter of the late Tan Sri Dr. Teh Hong Piow (right).
KUALA LUMPUR: Public Bank Bhd is acquiring a 44.15% stake in LPI Capital Bhd from the estate of the late Tan Sri Teh Hong Piow and Consolidated Teh Holdings Sdn Bhd (ConTeh) for RM1.72bil cash, or RM9.80 per share.
In a filing with Bursa Malaysia, Public Bank announced that the acquisition will result in a proposed mandatory general offer (MGO) to acquire all remaining LPI shares not already held by Public Bank for a cash price of RM9.80 per share following the proposed acquisition.
ALSO READ: Upbeat outlook for Public Bank, LPI Capital exercise
However, the offer price of RM9.80 per LPI share for the MGO is approximately 25% below its last traded price of RM13.
Upon completion of the proposed acquisition, Public Bank’s shareholding in LPI will increase from nil to 44.15%.
LPI is principally engaged in investment holding activities. LPI focuses on its core business in the underwriting of general insurance through its wholly-owned subsidiary, Lonpac.
Lonpac currently has 21 branches throughout Malaysia and 1 branch in Singapore. LPI also operates in Cambodia through a 45%-owned associated company. The remaining effective equity interest of 55% in Campu Lonpac Insurance Plc is held by Public Bank.
As at Sept 17, the issued share capital of LPI is RM398.4mil comprising 398.38 million LPI shares.
ALSO READ: Corporate development brewing in Public Bank
Public Bank intends to maintain the listing status of LPI on the Main Market of Bursa Securities.
“The proposed acquisition represents an opportunity for PBB to further expand its general insurance segment through the LPI Group’s platform to immediately gain a strong foothold and instant access to the LPI Group’s client base in Malaysia.
“This would enable PBB to provide a comprehensive complementary service to its current financial services offerings and establish a market presence in the general insurance segment in Malaysia, which is expected to be value accretive to the enlarged Public Bank Group,” Public Bank said.
The bank said the proposed acquisition is also in line with the Public Bank’s plans to expand its product and service offerings through strategic acquisitions besides organic growth.
“Further, with the inclusion of the LPI Group, being a long-established general insurance player as part of the Public Bank group of companies via the proposed acquisition, this would accelerate PBB’s vision to be one of the few companies in the industry to have a ‘Universal Banking Model’ that offers a comprehensive and diverse range of financial and related services under the same group,” it added.
Meanwhile, Teh Li Shian Diona, the youngest daughter of the late Tan Sri Dr. Teh Hong Piow also announced that the Estate and ConTeh intend to undertake a restricted offer for sale (ROFS) of a portion of their Public Bank shares, progressively over a 5-year period and will be in compliance with the Financial Services Act.
The restricted offer for sale will see the Teh family trimming its shareholdings in Public Bank to 10%.
“My father often said that the success of Public Bank was not his alone – it is built on the trust and loyalty of its shareholders and the relentless commitment of its employees, or as he would like to call them his “corporate family”.
“To honour his legacy and to show our deep appreciation and gratitude, we will be undertaking an exercise to distribute a portion of our Public Bank shares at a discount to all employees, directors and eligible shareholders of the Public Bank Group. This initiative aims to ensure that Public Bank remains in the hands of those who have nurtured its growth and success over the years, enabling us to continue building our legacy together,” Diona said.
“Although we will be streamlining our stake, I would like to take this opportunity to reiterate our firm and unwavering commitment to continue as the major shareholders of Public Bank. This is not just a role or title for us – it is an honour and a responsibility that we deeply cherish. We are devoted to upholding my father’s legacy and continuing the stewardship of this esteemed institution.”
