Public Bank's Take-Private Deal Unlikely to Affect Financials

Dow Jones09-09

0235 GMT - Public Bank's proposal to acquire the remaining 26.77% stake in Public Financial should have negligible impact on the Malaysia-listed lender, Maybank IB analyst Desmond Ch'ng says in a note. The 735 million Hong Kong dollar take-private could reduce Public Bank's capital buffer, but shouldn't hinder its dividend payout or plan to return 3.5 billion ringgit in excess capital over three years, he says. The deal is expected to be easily absorbed given Public Financial's less than 1% contribution to Public Bank's earnings. Over the longer term, Public Bank might dispose its Public Financial stake to unlock value and free up capital, given Hong Kong's competitive market, he adds. Maybank maintains its buy rating on Public Bank and keeps target price at 5.50 ringgit. Shares are 0.4% lower at 4.98 ringgit.

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