Public Bank Bhd is acquiring 44.15% in LPI Capital Bhd for a total cash consideration of RM1.72 billion or RM9.80 per share.
The proposed acquisition was announced by Public Bank Managing Director and Chief Executive Officer Tan Sri Dr Tay Ah Lek during a conditional sales and purchase signing ceremony between Tay and Consolidated Teh Holdings Sdn Bhd representative Diona Teh Li Shian earlier today.
Upon the completion of the acquisition, Public Bank’s shareholding in LPI Capital will increase to 44.15%, representing some 175.896 million of LPI Capital’s ordinary share.
Tay said the proposed acquisition is a strategic opportunity for Public Bank to further expand its general insurance segment into the Malaysian market through the LPI Capital.
“The acquisition will also allow Public Bank to establish an immediate market presence and strong foothold in the general insurance segment in Malaysia as a comprehensive complementary service to its current financial services and family takaful offerings,” he added.
He highlighted that the proposed acquisition represents a clear and unique opportunity for the financial institution to accelerate its vision towards a “Universal Banking Model” that offers a comprehensive and diverse range of financial and other related products and services under the same group.
“With our existing network of over 260 branches nationwide, LPI Capital will be able to leverage and expand its distribution channels and further grow its general insurance business in Malaysia.
“At the same time, we will also be able to tap into the sales and distribution network of LPI Capital and further expand our reach to cover its clients and customers,” Tay said, adding that both parties will explore possibilities on developing new integrated products and services catering to our customers’ financial and insurance needs.
Meanwhile, Public Investment Bank Bhd Chief Executive Officer Lee Yo-Hunn said the proposed acquisition is subject to the approval of Public Bank’s non-interested shareholders at an EGM to be held at a later date.
“Should the proposed acquisition be approved at the EGM, Public Bank will be obliged to extend an unconditional mandatory take-over offer for the remaining equity interest in LPI Capital not already owned by it,” Lee said, adding that Public Bank has received the approval from the Finance Ministry and Bank Negara Malaysia for the proposed acquisition on Aug 29, 2024, and this corporate exercise is expected to be completed in the first quarter of 2025.
“Barring any unforeseen circumstances, the proposed acquisition is expected to be value accretive and contribute positively to Public Bank’s future earnings,” Lee said.
Both Tay and Teh said there would not be any changes to the management team or board of directors for both Public Bank and LPI Capital upon the completion of this proposed acquisition.
