Malaysia’s third biggest lender by assets, Public Bank, said on Thursday that it will acquire a 44.15 per cent stake in general insurer LPI Capital for 1.72 billion ringgit ($400.5 million) in cash.
Public Bank will acquire the stake from Consolidated Teh Holdings and the estate of the late Teh Hong Piow, its founder, at 9.80 ringgit per share, or nearly 25 per cent lower than its last closing price of 13.00 ringgit, according to a stock filing.
It will also extend an mandatory general offer to acquire all the remaining LPI shares it doesn’t already hold at the same price.
The offer values LPI at around 3.9 billion ringgit, or 1.71 times its book value, 12.41 times its 2023 earnings, and an 8.88 enterprise multiple.
Public Bank said the proposed acquisition represents an opportunity for it to further expand its general insurance segment via LPI’s platform to immediately gain a strong foothold and instant access to the latter’s client base in Malaysia.
Public Bank added that the deal is expected to be earnings accretive and contribute positively to its future earnings.
The proposals are expected to be completed by the first quarter of 2025, according to the filing.
Public Investment Bank is the principal adviser on the transactions, the filing showed.
($1 = 4.2950 ringgit)
