CIMB, RHB Capital hand merger plan to BNM

Seeking approval for their venture with MBSB.

CIMB Group Holdings and RHB Capital have made a joint application to Bank Negara to seek approval for a merger of the two banking groups together with Malaysia Building Society Bhd.

According to a research note from Nomura, details of the proposed merger include: CIMB Islamic (unlisted wholly owned subsidiary of CIMB) will acquire MBSB for MYR2.82/share (19% premium to current price of MYR2.37).

Shareholders of MBSB can either opt for cash or for unlisted CIMB Islamic shares.

Further, RHB Capital will acquire the assets and liabilities of CIMB for MYR60.6bn at an exchange ratio of 1 RHB Capital share for 1.38 CIMB share.

This values CIMB at MYR7.27/share (or a P/BV of 1.7x), while RHB Capital would be valued at MYR10.03/share (or a P/BV of 1.4x).