MUFG Seek to Buy 73.8% in Danamon From Temasek
“Danamon is a well-respected institution in the local banking sector, renowned for its experienced and capable management team, sound business platform and profitable franchise, and would make a very welcome and strategic addition to the MUFG group as we press on with our regional strategy,” Futae said.
Under the plan, MUFG will first spend Rp 15.9 trillion ($ 1.2 billion) to buy 19.9 percent of Danamon shares in the next few days at Rp 8,323 a piece — two times Danamon’s book value, representing a 39 percent premium over the lender’s closing price at the Indonesia Stock Exchange last week.
The Japanese lender will then seek approval from the authorities to buy another 20.1 percent of the shares. MUFG expects to conclude the purchase by the end of September.
Indonesia allows single ownership in domestic banks at 40 percent, with exception granted in special cases — if the acquiring party is strong financially and willing to develop Indonesia’s economy.
In the final step, MUFG will seek to buy the remaining 33.8 percent of the shares from Fullerton Financial.
MUFG will also conduct a tender offer in accordance with the regulations to provide opportunity for public shareholders to cash in their holdings.
“With a strong Indonesian franchise for corporate lending and infrastructure financing, MUFG is well positioned to complement Danamon’s franchise and lead the bank forward into its next phase of growth,” Temasek Holdings president Tan Chong Lee said in separate statement.
“We believe that MUFG’s interest in Danamon is testament to their confidence in the bank and that the combination will also be well aligned with Indonesia’s development and growth objectives,” Tan said.
In 2013 Singapore’s DBS Group Holding dropped its bid to acquire Danamon, when Bank Indonesia changed ownership rules and imposed the ownership percentage cap.