Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD
CIMB Group Holdings Bhd's shares were traded lower in the morning session today on news that the group has agreed to
dispose 98 per cent of CIMB Aviva Assurance Bhd and CIMB Aviva Takaful Bhd for RM1.8 billion with Khazanah Nasional Bhd and Sun Life Financial Inc.
CIMB's shares fell four sen to RM7.57 as at 11.14 am, with 3,198,200 shares changing hands.
The deal will see Khazanah and Sun Life each paying RM900 million in respect of the transaction which includes entering into a new 20-year exclusive bancassurance agreement with CIMB Bank Bhd.
Khazanah and Sun Life are each acquiring 49 per cent of the company from Aviva International Holdings Ltd and CIMB Group Holdings Bhd, respectively.
Kenanga Research is positive on the sales as they are seen as unlocking the group's value.
It said the sale proceeds will enable CIMB to replenish its capital after its two major acquisitions made early last year.
"We believe the valuation of the sale is attractive due to the interest of both Khazanah and Sun Life to want to forge a long-term strategic alliance in the insurance sector and thus are willing to pay a higher price to land a good asset in the sector to kick-start their partnership," it said in a research note today.
The research house maintained an "outperform" rating on CIMB's shares with a target price of RM8.20.
Meanwhile, Alliance Research said CIMB is able to dispose its stake in CIMB Aviva since the stake comes with control premium and the disposal comprises exclusive rights for Sun Life, the new bancassurance partner, to distribute its insurance products, through CIMB Bank's network across Malaysia.
"Although the indicative gain of disposal to CIMB is about RM800 million based on the latest combined book value of CIMB Aviva entities, we understand that there were revaluations at group level in the past.
"Therefore the net gain could not be determined at this juncture," it added.
Alliance Research is maintaining its "neutral" recommendation for CIMB with an unchanged target price of RM7.81. -- Bernama
Company Name: CIMB GROUP HOLDINGS BERHAD
| Research House: ALLIANCE | Price Call: HOLD | Target Price: 7.81 |
CIMB Group Holdings Bhd's shares were traded lower in the morning session today on news that the group has agreed to
dispose 98 per cent of CIMB Aviva Assurance Bhd and CIMB Aviva Takaful Bhd for RM1.8 billion with Khazanah Nasional Bhd and Sun Life Financial Inc.
CIMB's shares fell four sen to RM7.57 as at 11.14 am, with 3,198,200 shares changing hands.
The deal will see Khazanah and Sun Life each paying RM900 million in respect of the transaction which includes entering into a new 20-year exclusive bancassurance agreement with CIMB Bank Bhd.
Khazanah and Sun Life are each acquiring 49 per cent of the company from Aviva International Holdings Ltd and CIMB Group Holdings Bhd, respectively.
Kenanga Research is positive on the sales as they are seen as unlocking the group's value.
It said the sale proceeds will enable CIMB to replenish its capital after its two major acquisitions made early last year.
"We believe the valuation of the sale is attractive due to the interest of both Khazanah and Sun Life to want to forge a long-term strategic alliance in the insurance sector and thus are willing to pay a higher price to land a good asset in the sector to kick-start their partnership," it said in a research note today.
The research house maintained an "outperform" rating on CIMB's shares with a target price of RM8.20.
Meanwhile, Alliance Research said CIMB is able to dispose its stake in CIMB Aviva since the stake comes with control premium and the disposal comprises exclusive rights for Sun Life, the new bancassurance partner, to distribute its insurance products, through CIMB Bank's network across Malaysia.
"Although the indicative gain of disposal to CIMB is about RM800 million based on the latest combined book value of CIMB Aviva entities, we understand that there were revaluations at group level in the past.
"Therefore the net gain could not be determined at this juncture," it added.
Alliance Research is maintaining its "neutral" recommendation for CIMB with an unchanged target price of RM7.81. -- Bernama
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