INVESTMENT management firm Vertical Theme is planning to seek approval in the coming weeks to start talks about selling its stake in Alliance Bank Malaysia, according to people familiar with the development.
Vertical Theme, a Malaysian holding company, is considering selling its roughly 29 per cent stake in Alliance Bank to Singapore’s biggest lender, DBS Group Holdings, the people said, asking not to be identified because the deliberations are private.
Under local rules, Vertical Theme needs to submit an application to Malaysia’s central bank to start any talks. If a deal goes through, DBS may consider raising its stake in Alliance to up to 49 per cent via a voluntary partial general offer, the people said.
Alliance Bank shares rose as much as 1.2 per cent in Kuala Lumpur on Thursday (Jan 16). The lender has a market value of around US$1.7 billion. DBS climbed up to 1.3 per cent. The Singaporean lender has a market value of US$91 billion.
A deal for Alliance would give DBS a foothold in Malaysia, where Singaporean rivals Oversea-Chinese Banking Corp and United Overseas Bank already have an established presence.
Singaporean state investor Temasek Holdings owns 49 per cent of Vertical Theme via Duxton Investment & Development, while the remainder is held by RRJ Capital founder Richard Ong, hotelier Ong Beng Seng and corporate adviser Seow Lun Hoo through Langkah Bahagia.
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Temasek also has a 31.9 per cent stake in DBS, data compiled by Bloomberg show.
Deliberations are ongoing and Vertical Theme may decide not to pursue a transaction, the people said.
A representative for DBS declined to comment. Vertical Theme’s backers also declined to comment.
Outgoing DBS chief executive officer Piyush Gupta has said that Malaysia, India and Indonesia are key targets for expansion. Among recent moves, DBS has made an initial proposal to buy Bank Pan Indonesia, Bloomberg News reported in December, while it has also received regulatory approval to increase its holding in its Chinese securities venture to 91 per cent. Tan Su Shan will succeed Gupta as CEO in March.
Reuters reported in November that DBS was exploring expanding into Malaysia, including via stake purchases in banks such as Alliance Bank. BLOOMBERG
