Thanachart Bank to buy Siam City Bank stake

12.03.2010 03:47

Thanachart Bank will purchase a 47.58% stake in Siam City Bank PCL from the Bank of Thailand's rescue arm in a deal valued at 68 billion baht ($2.08 billion).

Thanachart Bank that is 48.99% owned by Canada's Bank of Nova Scotia and 50.92% owned by Thanachart Capital PCL., has long been considered the front-runner for the Siam City Bank stake. It plans to merge the two entities to create Thailand's fifth-largest bank by assets, The Wall Street Journal reports.

The WSJ calls the deal "Thailand's second-largest merger-and-acquisition deal" in the financial sector.

As the majority of Thanachart's credit extension is in the hire-purchase segment, while Siam City's is in corporate and housing loans, the merger will also help extend their loan portfolios.

Bank of Thailand Assistant Gov. Tongurai Limpiti, a member of the Financial Institutions Development Fund board, the central bank's rescue arm, said Thanachart Bank will pay 32.50 baht per share, which is 1.6 times the book value of Siam City Bank at the end of 2009.

A tender offer to existing Siam City Bank shareholders will be made from late April until July, after which the bank will be delisted, Thanachart Capital Chairman Banterng Tantivit said. (Click to read more...)

[Source: The Wall Street Journal]

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