ING targets May launch of $1.2 billion Thai bank stake sale: sources

Mon Apr 15, 2013 3:26am EDT
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By Saeed Azhar and Denny Thomas

SINGAPORE/HONG KONG (Reuters) - ING NV ING.AS is aiming for May to launch the sale of its $1.2 billion stake in Thailand's TMB Bank (TMB.BK: Quote), as the Dutch financial services company awaits the end of Malaysia's election to include more bidders, sources familiar with the matter told Reuters.

The planned sale of the 31 percent stake comes as ING sheds assets to repay a 2008 bailout by the Dutch government. It also comes at a time when mergers and acquisition activity in Southeast Asia's banking sector is expected to hit a record level this year.

Targeting a May launch is meant to encourage Malaysia's two dominant banks - CIMB Group Holdings Bhd (CIMB.KL: Quote) and Malayan Banking Bhd (MBBM.KL: Quote) - to join the auction, the sources said. The two banks, and any other potential bidders from Southeast Asia's third-largest economy, are expected to hold off on any major moves until a new government is determined. Malaysia has set national elections for May 5.

The sources said the auction was also likely to attract interest from Japanese, Chinese and South Korean lenders. The sale could also spark a takeover battle for TMB, which has a market value of $3.8 billion, as the potential buyer would be required to make a mandatory offer for the rest of the bank under Thai law.

Foreign banks can buy up to 25 percent of a Thai bank without central bank approval, but a stake of up to 49 percent requires approval from the Thai central bank and more than 49 percent requires approval from the Thai government.

ING has picked J.P. Morgan (JPM.N: Quote) to find a buyer for the stake in TMB Bank, Thailand's seventh-largest lender, the sources said.

The sources declined to be identified because the sale plan is not public. ING and J.P. Morgan declined to comment.

"ING has informed us they will appoint a financial adviser to look into the TMB stake," TMB's chairwoman, Saowanee Kamolbutr, said without elaborating. Saowanee is the representative of Thailand's Finance Ministry on the TMB board.   Continued...

Employees of ING group take a break in front of their office in Amsterdam November 7, 2012. REUTERS/Michael Kooren