Public Bank Considers Buying Late Founder’s Family Stake in LPI
Background
Established in 1966, Public Bank has 293 branches in Malaysia and 157 overseas, and total assets of about RM493 billion.
Potential Deal
KUALA LUMPUR: Public Bank Bhd is considering buying its late founder Teh Hong Piow’s family stake in Lonpac Insurance Bhd, people familiar with the matter said. Malaysia’s second-biggest lender by market value is expected to pay in cash and shares for Consolidated Teh Holdings Sdn Bhd’s nearly 43% stake in LPI Capital Bhd, the people said, asking not to be identified as the information isn’t public.
Terms of the Deal
The potential deal would trigger a buyout of the remainder of LPI. Public Bank wants to acquire the insurer as it aims to be a full-fledged universal bank, offering a variety of financial services. LPI’s shares have risen about 9% this year, giving the company a market value of RM5.2 billion (US$1.2 billion). Public Bank has advanced 6.5% to a value of RM88.7 billion.
Suspension of Trading
Public Bank and LPI both asked for trading to be suspended in Kuala Lumpur today pending an announcement, which the people said could come as soon as this week. LPI declined to comment. Public Bank didn’t respond to requests for comment.
About the Companies
LPI Capital Bhd
Founded in 1962 as London & Pacific Insurance Co, LPI is an investment holding company. According to its website, it adopted its present name in 1999 after transferring its insurance business to subsidiary Lonpac.
Public Bank Bhd
Public Bank, established in 1966, has 293 branches in Malaysia and 157 overseas, and total assets of about RM493 billion, the website showed. Teh died in 2022, aged 92.
Conclusion
Public Bank’s potential acquisition of LPI would be a significant move towards becoming a full-fledged universal bank. The deal would provide the bank with a strong foothold in the insurance industry and expand its services offerings to customers.
FAQs
Q: Why is Public Bank considering buying LPI?
A: Public Bank wants to acquire LPI to be a full-fledged universal bank, offering a variety of financial services.
Q: What is the potential deal worth?
A: The deal is expected to be worth RM5.2 billion (US$1.2 billion), which is the market value of LPI.
Q: Will the deal trigger a buyout of the remainder of LPI?
A: Yes, the deal would trigger a buyout of the remainder of LPI.
Q: Has Public Bank responded to the rumors?
A: No, Public Bank did not respond to requests for comment.