Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD
CIMB Group Holdings Bhd (CIMB MK, Hold, TP: RM7.00) will sign a deal soon to buy 60% of Philippine conglomerate San Miguel Corp's unlisted banking arm, the chairman of Bank of Commerce said. It would be the first foray by the bank of Phillipines, further boosting its regional footprint after it bought some equities and investment banking units from Royal Bank of Scotland Group Plc elsewhere in Asia earlier this month. The deal will also allow San Miguel to keep a minority stake in the unlisted bank while focusing on its new ventures such as power, mining, telecoms, infrastructure, and more recently, airlines. (Financial Daily)
Comment: This acquisition should have immaterial impact on CIMB. Based on various news reports, the cost of the acquisition is said to be less than RM1bn, with an estimate of RM800m for the 60% stake. At RM800m, this only constitutes 1.4% of CIMB's market cap of RM57bn. Meanwhile, we will await the conclusion of the deal when more financial details are likely to be revealed. Note that CIMB's current share price is above our target price (Leong Hon Sze)
Company Name: CIMB GROUP HOLDINGS BERHAD
| Research House: ECMLIBRA | Price Call: HOLD | Target Price: 7.00 |
CIMB Group Holdings Bhd (CIMB MK, Hold, TP: RM7.00) will sign a deal soon to buy 60% of Philippine conglomerate San Miguel Corp's unlisted banking arm, the chairman of Bank of Commerce said. It would be the first foray by the bank of Phillipines, further boosting its regional footprint after it bought some equities and investment banking units from Royal Bank of Scotland Group Plc elsewhere in Asia earlier this month. The deal will also allow San Miguel to keep a minority stake in the unlisted bank while focusing on its new ventures such as power, mining, telecoms, infrastructure, and more recently, airlines. (Financial Daily)
Comment: This acquisition should have immaterial impact on CIMB. Based on various news reports, the cost of the acquisition is said to be less than RM1bn, with an estimate of RM800m for the 60% stake. At RM800m, this only constitutes 1.4% of CIMB's market cap of RM57bn. Meanwhile, we will await the conclusion of the deal when more financial details are likely to be revealed. Note that CIMB's current share price is above our target price (Leong Hon Sze)
Source: ECM Newz Bits 17 April 2012
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