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MBSB-MIDF said to be merging via share swap

20 Apr 2022 | Wednesday Source: The Edge Markets

A planned merger between Malaysia Building Society Bhd (MBSB) and Malaysian Industrial Development Finance Bhd (MIDF), expected to be done via a share swap, would solidify MBSB’s position as the country’s second-largest standalone Islamic bank by assets and profit after Bank Islam Malaysia Bhd.

“They’re expected to do a share swap,” a source familiar with the matter tells The Edge.

The planned merger will put state-owned fund management giants Permodalan Nasional Bhd (PNB) and the Employees Provident Fund (EPF) on opposite sides of the negotiation table. MIDF is wholly-owned by PNB, whereas MBSB is 65.87%-owned by the EPF.

Key to the success of the merger is whether they can agree on the valuations. It is envisioned that the EPF will end up with a controlling stake of about 50% in the merged entity, with PNB holding about 20%, according to another source.

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