ING Puts $775 Million Thailand Bank Stake up for Sale – Sources

By and | March 23, 2012

ING Groep NV has put its roughly $775 million stake in Thailand’s TMB Bank Pcl on the block as the bailed-out Dutch financial services group pushes ahead with Asian divestments, sources familiar with the matter told Reuters.

ING, which is selling assets to help repay a 2008 rescue by the Dutch government, recently hired an investment bank to help find a buyer for its 31 percent stake in TMB Bank, the sources added, underscoring its seriousness to pursue an auction.

The planned sale could spark a takeover battle for TMB as the potential buyer of ING’s stake will be required to make a mandatory offer for the rest of the company under Thai laws.

ING and TMB declined comment. The sources declined to be identified as the matter was not public.

ING bought the stake in Thailand’s seventh-largest lender in 2007 for €460 million ($610 million). The Thai government also owns 26.1 percent of TMB, and has said in the past that it wants to sell its entire stake.

ING, which received a €10 billion [$13.27 billion] Dutch government bailout during the financial crisis, is also expected to sell its Asian insurance and investment management business in a deal estimated to be worth over $6 billion [€4.52 billion].

It was not immediately clear whether ING will run the TMB auction simultaneously with the planned sale of the insurance and investment management businesses. Sources said no sale was currently underway for the TMB stake and it was unclear if ING could launch a formal auction any time soon.

POTENTIAL SUITORS
TMB has a market value of about $2.5 billion [€1.884 billion], which means an outright purchase could be out of the reach of some potential bidders, but Thailand’s relatively fast growing economy and a stable government could attract several Asian suitors.

Malaysia’s Malayan Banking Corp, which has a market value of about $22 billion [€16.58 billion], and state-owned Korea Development Bank are among the potential buyers interested in the stake, the sources said, and both would have the capacity for a purchase.

“We are not looking at it,” a KDB spokesman said. Malaysia’s Maybank declined to comment.

Thailand limits foreign ownership in domestic banks at 49 percent but buyers can negotiate with the central bank and the government if they want to buy more than that.

In the past couple of years both Malaysia’s CIMB Group Holdings and Industrial and Commercial Bank to China have been allowed to buy small banks in Thailand.

Reports in Thailand’s local media earlier this year said the Finance Ministry was close to selling its 26 percent stake to foreign investors, pushing TMB shares up 11.4 percent so far this year.

TMB shares were trading up 1.1 percent on Friday, while the benchmark Thailand share index was flat.

ING owns a 25.2 percent direct stake in TMB and 5.84 percent though non-voting depository receipts.

Under the initial agreement reached in 2007, it has an option to buy another 5 percent stake in TMB from the government. That option expires by the end of 2012, according to a person with direct knowledge of the agreement.

(Reporting by Michael Flaherty and Denny Thomas in HONG KONG; Additional reporting by Saeed Azhar in SINGAPORE, Ploy Ten Kate in BANGKOK, Gilbert Kreijger in AMSTERDAM, Ju-min Park in SEOUL, Yantoultra Ngui In Kuala Lumpur; Editing by Richard Pullin)

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