Thai Thanachart Bank Makes Top Bid of $984 Million for Siam City Bank Stake

The small-sized Thanachart Bank offered to buy the stake at THB32.50 per share, the person said, putting the value of the deal at THB32.67 billion ($984.3 million).

At about 0330 GMT, Siam City Bank shares were down 0.9% at THB29.25.

Long-considered the frontrunner in the bid, Thanachart Bank will now enter negotiations on the deal details with the Financial Institutions Development Fund, the person said.

Last year, Thanachart Bank said it would merge the two entities if it secured a majority stake in Siam City Bank.

Analysts said such a merger could create Thailand's fifth-largest bank by assets, and help diversify the two banks' loan portfolios. A majority of Thanachart's credit extension is in the hire purchase segment, while those of Siam City are in corporate and housing loans.

Thanachart Bank is 50.92%-owned by Thanachart Capital PCL (TCAP.TH) and 48.99%-owned by Canada's Bank of Nova Scotia.

The person said the local arm of HSBC Holdings PLC (HBC) was the other potential buyer at the close of bidding Monday, but would not reveal the price it offered.