TA ups RHB to buy after deal with OSK
KUALA LUMPUR, May 29 — TA Securities raised its call on RHB Capital Bhd to buy after the bank’s 100 per cent acquisition of OSK Investment Bank in a deal worth US$620 million (RM1,935 million).
“We are positive on this potential acquisition,” said the broker in a research note today.
“Going forward, execution and the ability to integrate two organisations with different cultures smoothly and merging of IT and other systems to be in compliance with Basel 3 will be the key risks,” TA said.
RHB yesterday said it would pay for OSK’s investment bank by issuing 245 million of its shares at RM7.36 each plus RM147.5 million in cash.
The acquisition will boost RHB’s share of the Malaysian brokerage market to around 15 per cent, overtaking CIMB Group Holdings Bhd as the country’s biggest broker.
RHB will also gain access to OSK’s operations in Singapore and other markets such as Hong Kong and regional giant Indonesia.
As of 1013 (0213 GMT), RHB shares fell 2.3 per cent while shares in OSK plunged 8.05 per cent, against a 0.13 per cent drop in the Malaysian benchmark stock index. — Reuters