KUALA LUMPUR, Feb 2 2016 : Malaysia Building Society Bhd (MBSB), DRB-HICOM Bhd and Khazanah Nasional Bhd have decided to end negotiations for the proposed merger of MBSB and Bank Muamalat Malaysia Bhd.
In a filing to Bursa Malaysia, MBSB informed that the parties have not been able to reach an agreement on the terms and conditions of the proposed merger after a series of discussions and negotiations.
“Accordingly, the parties have mutually agreed to end all discussions and not proceed with the proposed merger,” it added.
The parties were first given the deadline of Dec 31, 2015 by Bank Negara Malaysia to conclude negotiations. However on Dec 23, 2015, they submitted an application for a month’s extension which was granted and ended today.
Bank Muamalat shareholders comprise DRB-HICOM, which holds 70 per cent shares, while the remaining shares are held by Khazanah and MBSB is majority owned by the Employees Provident Fund with a total of 65 per cent stake.
“All parties have diligently been working towards formulating a position that would best strengthen the new merged entity as well as serve the best interest of all shareholders.
“Unfortunately despite these efforts, we were not able to commonly agree on that position,” MBSB President and Chief Executive Officer Datuk Ahmad Zaini Othman said, adding that there was a lot of value in MBSB although it was not a banking institution.
He said the MBSB team had already embarked on revised strategies in the fourth quarter of last year, taking cognizant of changes in the economy.
“We are also being more prudent in the sectors that we continue to lend and our impairment programme is running into its second year”, he said.
Ahmad Zaini said MBSB would continue to strengthen its funding programme and build up its capabilities in both business and operations.
A merger between MBSB and Bank Muamalat would have created the country’s largest stand-alone Islamic bank with some RM62.1 billion in assets.
At mid-day, MBSB shares edged down two sen to RM1.43 and DRB-HICOM was flat at RM1.04. – Bernama