Nazir denies merger plan called off

January 15, 2015 2:05 am 

KUALA LUMPUR, Jan. 14 — CIMB Group Chairman Datuk Seri Nazir Razak has denied reports saying that its proposed merger with RHB Capital Bhd and malaysia Building Society Bhd (MBSB) has been called off.

"Negotiations are still ongoing and we will make an announcement, on whether it will be on or off, very soon," he told reporters after the launch of the special report titled "Re-drawing the Asean Map: How Companies are Crafting New Strategies in Southeast Asia."

Nazir said that the management of the three companies had been in intense discussions over the past few weeks.

He said while there was never a definitive period for the deal, the three parties had indicated to complete discussions on whether they would proceed with the merger some time this month.

"We have not gone to the next phase of the process which is to seek regulatory and shareholders approvals.

"At the moment, we are in the process of validating the business case of the merger, that is, can we create value based on the original assumptions, based on the terms that we negotiated and based on the economic environment," he said, adding he could not disclose the date of the next board meeting.

On reports saying the merger was scrapped because RHB Capital was seeking more cash, Nazir said: "That is not true. There is no truth to that."

"Our relationship with RHB Capital and MBSB continues to be superb and negotiations are being done at a very pleasing level. The cooperation have been superb," he said.

Bank Negara malaysia gave the greenlight for the three financial institutions to commence discussions on the proposed merger on July 10 last year, with the aim of creating an enlarged Islamic banking franchise.

The merger, if it goes through, will see CIMB disposing of all its assets and liabilities to RHB Capital via a share swap at an exchange ratio of one RHB Capital share for 1.38 CIMB Group shares.

The second part of the deal involves the proposed merger of CIMB Islamic, RHB Islamic and MBSB to create a mega Islamic bank, which will remain a subsidiary of the merged CIMB-RHB. (PNA/BERNAMA)

LGI/CDN

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