The transition will be based on an agreed price of IDR7, 000 per Danamon share seized by AFI, which holds a 67.37% stake in PT Bank Danamon Indonesia Tbk (Danamon), and according to the terms of the deal the total consideration would be paid as 439 million new DBS shares at an issue price of S$14.072 per new DBS share.
DBS said that, after closing the current deal, it will acquire the remaining listed shares from the other shareholders of Danamon for a cash offer price of IDR7, 000 per Danamon share through a mandatory tender offer (MTO).
The price of IDR7,000 per Danamon share represents a premium of 56.3% over its one-month volume weighted average price (VWAP) per share of IDR4,480.
DBS CEO Piyush Gupta said that over the past two years, DBS has strengthened its franchise across Asia and the bank is now well-positioned to embark on the next phase of growth.
"Indonesia is an exciting Asian market and we believe that we will be able to contribute towards the growth of the Indonesian banking sector, especially in areas such as infrastructure financing, project financing, trade finance and syariah banking. With Danamon, we will be able to significantly diversify our revenue mix and further consolidate our position as the Asian Bank of Choice," Gupta said.
The deal will translate DBS ambition to become the fifth largest bank in Indonesia, and will intensify it presence in microfinance, auto lending and a growing business in the small and medium enterprises (SME) and retail segments, claims the acquirer.
According to industry calculation, Danamon will be merged with PT Bank DBS Indonesia (DBS Indonesia), subject to receipt of requisite regulatory approvals and the united banking entity will bolster DBS’ existing presence in Indonesia.
Credit Suisse and Morgan Stanley were appointed by DBS as its joint financial advisers on the proposed acquisitions of Danamon and Alliance, WongPartnership and Hadiputranto, Hadinoto & Partners as its legal advisers.
