IDX-listed Minna Padi Investama Sekuritas announced on Monday saying that it is planning to acquire a majority stake in Bank Muamalat.
The securities firm is said to be a standby buyer and will use IDR 4.5 trillion (about US$333 million) to purchase Bank Muamalat’s 80 billion extended new shares.
Minna Padi Investama Sekuritas will then subscribe to Muamalat’s unabsorbed shares and become its 51 percent shareholder.
“The purpose of the transaction is to allow the company’s business expansion in the Islamic banking sector,” Minna Padi explained.
In fact, it is looking to enhance Kosikornbank’s presence in Southeast Asia, China, Japan, and South Korea which are considered a crucial market for Thai business.
Backed by Indonesian businessman Setiawan Ichlas, Minna Padi plans to fund the buyout through its own rights offering – selling 5 billion shares at a price yet to be disclosed.
But if the deal was to follow the firm’s current stock price which was IDR 1,410 at Friday’s market close – Minna Padi could raise up to IDR 7 trillion (about US$519 million).
After the acquisition, the firm plans to use the remaining capital to invest in other companies and strengthen its capital structure.
For now, Minna Padi’s extraordinary general shareholder meeting will be held on November 22 to seek an approval for the rights issuance plan.
If the company’s shareholders forgo their rights, they will see their ownership diluted by up to 30.7 percent.
Founded in 1991, Bank Muamalat is Indonesia’s first Islamic bank. It has 338 offices operating across Indonesia, along with a presence in Malaysia.
The bank’s main shareholders include Islamic Development Bank, Kuwait’s Boubyan Bank, Saudi Arabia’s Atwill Holdings Limited, and National Bank of Kuwait.