KUALA LUMPUR: CIMB Group Holdings Bhd may have to pay at least RM10.12 per share to take over RHB Capital Bhd as part of the former's potential tripartite merger with the latter and Malaysia Building Society Bhd, a research house said.
"Of the three, RHB seems a little more undervalued of the lot, trading at only 1.29x its book value as at March 31 2014," PublicInvest Research said in its note today, when commenting on the merger prospect that will create Malaysia's largest banking group, superceding Malayan Banking Bhd.
"By comparison, CIMB trades at 1.68x, MBSB at 1.60x while Maybank is a higher 1.84x. For RHB's shareholders to accede, a higher offer of 1.5x would be more palatable, valuing it at RM10.12 per share, a 16 per cent premium to its closing price of RM8.72," the firm added.
PublicInvest pointed that news reports quoting sources had touted a 1.75x valuation, and to be done via a share swap.
Trading of CIMB, RHB and MBSB shares were suspended pending material announcement.
The three are expected to announce later today that they have received Bank Negara Malaysia's approval to start talking about merger.