Extension to exclusive talks for RHB-AmBank merger?

KUALA LUMPUR: A firm merger announcement seems unlikely from AmBank Group and RHB Group today.

Instead, analysts said the two banks may announce a request to Bank Negara Malaysia to extend their exclusive talks from the August 30 deadline.

AmBank and RHB, in separate filings to Bursa Malaysia yesterday, requested for the suspension of their share trading, pending a material announcement related to the merger talks.

“It is most likely that the banks are seeking an extension of their exclusive talks, and not the merger announcement itself,” said a Kenanga Invesment Bank analyst when asked by NST Business, today.

“It couldn’t possibly be the announcement of the merger itself, as three months are too short of time to conclude discussions of this size,” he said, adding that the industry is positive that the merger will take place and it is just a matter of time at this point.

The analyst explained that the “marriage” between these two banking groups is most ideal given the fact that they are more or less trading at the same price. Also, a merger would see each bank addressing the other’s weakness.

“AmBank has the domestic reach, while RHB doesn’t. On the other hand, RHB has the Asean reach, while AmBank doesn’t. So a merger really would make sense,” he noted.

An MIDF Research analyst echoed the sentiment, saying: “We are actually expecting an extension of the exclusive period.”

Bank Negara had in June given its approval for the two banks to start merger negotiations.