BBL Clears the Air by Announcing a Go-Ahead on “Permata” with an Investment of ฿81bn

Bangkok Bank Public Company Limited (BBL) has made an official announcement to clarify the news reported on the purchasing of Standard Chartered’s PT Bank Permata Tbk in Indonesia.

On 12 December 2019, BBL stated that it had entered into a conditional share purchase agreement (the SPA) with Standard Chartered Bank (Standard Chartered) and PT Astra International Tbk (Astra) in respect of the proposed purchase by BBL from Standard Chartered and Astra of 24,991,429,332 Series B shares in total in PT Bank Permata Tbk (Permata), representing 89.12% of the total issued and outstanding shares in Permata in accordance with the resolution of the Board of Directors’ Meeting No. 12/2019, given on 11 December 2019.

Each of Standard Chartered and Astra respectively will sell 12,495,714,666 Series B shares, representing 44.56% of the total issued and outstanding shares in Permata, to BBL.

 

The Transaction will be effected on the basis of an agreed valuation of a 1.77 times multiple of Permata’s book value (subject to certain adjustments). This implies, on the basis of Permata’s book value as of 30 September 2019, an indicative purchase price of IDR 1,498 per share and an indicative transaction value of IDR 37,430,974 million (approximately US$ 2,674 million or THB 81,017 million) for the 89.12% stake in Permata.

BBL expects the Transaction to be financed via a combination of internal resources and financing through our routine funding sources. At this stage, BBL does not expect to raise equity specifically for the purpose of funding this Transaction.

 

BBL’s transaction rationale are as follows;

1) Deepens BBL’s presence in Indonesia, the largest ASEAN economy with GDP of US$1.04 trillion3 and 267 million population with young working-age population, growing middle and upper-income class, rapid digital penetration, high credit growth, and large unbanked population.

2) Aligns with BBL’s international strategy to transform into a leading regional bank with larger presence in key ASEAN markets.

3) Establishes a strong foundational platform in a highly attractive and fast-growing market through a quality bank of scale.

4) Uniquely positions BBL to capture new and expanding opportunities arising from increasing ASEAN financial and economic integration.

5) Increases BBL exposure towards high growth markets.

6) Enhances cross-border capabilities for Thai corporates in their increasing overseas expansion needs –Thai investment to Indonesia grew approximately 25% annually since 2008.

7) Results in immediately (FY20E) accretive EPS and ROE for BBL (assuming the Transaction completes within 2020), with BBL’s capital position expected to remain robust post-acquisition.

 

BBL stated that the completion of the Transaction is subject to a number of customary conditions precedent in the SPA being fulfilled. Those conditions precedent include, without limitation, receipt of (i) the approval of general meeting of shareholders and approval of the Bank of Thailand for BBL’s acquisition of Permata and (ii) approvals from the Otoritas Jasa Keuangan (the OJK) in relation to the Transaction, including fit and proper approval of BBL as a controlling shareholder of Permata and the OJK’s approval of the proposed acquisition structure.

BBL will be proposing the Transaction to its shareholders for approval at the appropriate time prior to completion of the Transaction.

Subject to the relevant approvals have been obtained and the satisfaction of the conditions precedent under the SPA, BBL expects the completion of the Transaction to take place within 2020. BBL anticipates conducting a mandatory tender offer for the remaining 10.88% stake in Permata at the same purchase price following completion of the Transaction.

 

About PT Bank Permata

Established in 1955, Permata is a leading commercial bank in Indonesia, offering a complete range of banking products and services to over 3.5 million retail, SME, and corporate customers. It is listed on the Indonesia Stock Exchange. As of 30 September 2019, Permata had 332 outlets (including branches and mobile branches) and 989 ATMs across 62 cities in Indonesia. Permata has loans of approximately IDR 108 trillion (approximately US$ 7.6 billion or THB 234 billion) and deposits of IDR 120 trillion (approximately US$8.5 billion or THB 259 billion) as at 30 September 2019. Permata had 7,670 employees as at end of 30 September 2019.