RETAIL BANKING | Cesar Tordesillas, Thailand

Japan's MUFG, Malaysia's CIMB bid for $1.5-B stake in Thailand's BAY

Japan versus Malaysia for Thai bank.

This is the emerging scenario surrounding General Electric’s US$1.5 billion stake sale in Thailand’s Bank of Ayudhya.

Japan's Mitsubishi UFJ Financial Group is among the first round bidders.

Malaysia’s CIMB Group Holdings reportedly also lodged a bid.

Singapore’s Oversea-Chinese Banking Corp, which was earlier seen as a potential bidder, did not submit a first-round bid, the sources said.

It is speculated that Siam Commercial Bank could be a bidder for Bank of had not held any merger negotiations with GE Capital on Bank of Ayudhya.

Under Thailand’s single presence policy, a local bank cannot hold a stake in another bank, which led to speculation that the two banks could be merged.

MUFG and CIMB declined to comment.

Suitors of GE’s Thai bank stake are expected to seek full control of the bank, which is also Thailand’s No. 1 retail bank with a US$5.9 billion market value.

GE received multiple bids last week for its 25.3 per cent stake, with second round offers due after December 25, according to sources with direct knowledge of the matter.

Any suitor seeking to take control of the bank would have to overcome several hurdles, including a 49 percent cap on foreign ownership and Thailand’s single presence policy on bank ownership.

The suitors for GE’s stake were asked to also present a detailed proposal on how they plan to grow the bank’s business, one of the sources said.

The outcome of GE’s sale process is being closely watched by ING, which is also preparing to offload its 31 percent stake in TMB Bank plc, which is worth about US$786 million.

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