BusinessTimes
THE Employees Provident Fund (EPF) has received two offers last week for its shares in Malaysia Building Society Bhd (MBSB), a mortgage provider, bankers familiar with the matter said yesterday.
"We are evaluating the offers. A decision on the matter will be made with the best interest of EPF and MBSB at heart," an EPF spokesperson told Business Times.
The spokesperson declined to reveal more details.
RHB Investment Bank Bhd is advising EPF on the sale. EPF holds a controlling 62.41 per cent in MBSB.
Business Times understands that state-owned Bank Kerjasama Rakyat Malaysia Bhd, the country's largest cooperative bank, is one of the parties which made a detailed offer last week, after it received the nod from the Ministry of Finance to proceed with its plans.
The Bank Rakyat plan, split in two stages with different timelines, will first see it buying a 30 per cent stake in MBSB.
Subsequently, Bank Rakyat will inject money for new shares and this will erode EPF's shareholding further.
The bank's offer, which is in the range of RM2 a share, is a steep premium over MBSB's asset backing per share of RM1.29, a source involved in the advisory of the sale said.
This is in line with similar deals in the financial sector where offers are between 1.5 times and two times the book value.
Bank Rakyat has cash and short-term funds of RM1.5 billion as well as 111 branches nationwide. The bank posted a net profit of RM368 milion for the financial year ended December 31 2006.
EPF has taken some flak in recent years over its investment in MBSB, after the company suffered six straight years of losses.
However, over the last three financial years, MBSB has stayed in the black, largely due to the professional management team appointed by EPF.
For its financial year ended December 31 2006, MBSB's revenue was up 28 per cent to RM293.1 million while net profit stood at RM40.2 million.
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