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Published on November 9, 2007

The board of TMB Bank has decided to sell 13.11 billion new shares, accounting for a 30-per-cent stake, to ING Bank after the Dutch institution increased its offer price from Bt1.40 to Bt1.60 per share.

TMB stock yesterday bucked the downward market trend by rising 7.59 per cent to Bt1.70.

"The meeting of the board of directors has considered a proposal from ING Bank, which is a new strategic partner of the bank, and another proposal from a group of institutional investors, by comparing the proposal of ING Bank with that of the group of institutional investor in various aspects, such as the highest financial and business benefits to be received by the bank and shareholders of the bank, and the adjustment of the subscription price proposed by ING Bank and its group from Bt1.40 per share to Bt1.60 per share," TMB said in a statement yesterday.

'The increase in ING's subscription price was due to an unsolicited offer delivered to TMB on November 5 by another group of financial institutions.

"After due and careful consideration by TMB's board, a decision was reached to choose the ING proposal, which is deemed by the board to be more beneficial to the bank and its shareholders."

DBS Group Holdings together with Deutsche Bank was the other group which bid for TMB shares, at Bt1.60 per share. As of April 9, DBS Bank owned 18.01 per cent in Thailand's fifth-largest bank.

The offer by DBS/Deutsche Bank was made to TMB's board on Tuesday - the original date for the board to approve ING's previous offer - and this delayed the agreement with ING.

ING will acquire a 25.2-per-cent stake or 10.97 billion common shares in TMB Bank, and another 4.9 per cent or 2.14 billion units of the bank's non-voting depository receipts (NVDRs).

The shares and NVDRs are part of TMB's recapitalisation plan to issue 25 billion shares. The local bank will offer the remaining 11.89 billion newly issued shares to existing shareholders - including the Finance Ministry and DBS - at Bt1.40 each.

Proceeds from the share allocation will then be raised from the previous estimate of Bt35 billion to Bt37.62 billion.  

The transaction with ING is subject to approval from regulators and TMB's shareholders, who meet on November 27.

The bank's board also approved a waiver for ING Bank from launching a tender offer to purchase the remaining shares from other shareholders.

The deal is expected to be completed by the end of the year.

Finance Minister Chalongphob Sussangkarn said the ministry saw no obstacles to the deal between TMB and ING. "I've been informed about the deal. It shouldn't be a problem," he said.

"TMB Bank is willing to welcome ING Group to participate in the bank's capital-increase shares. This would not only strengthen the bank's financial position but also colaunch financial products through the bank's extensive network," TMB chairman Somchainuk Engtrakul said.

TMB posted a net loss of Bt2.54 billion for its consolidated unreviewed third-quarter earnings, compared with a Bt18.37-billion net loss in the previous quarter and Bt1.29 billion in net profit for the same period last year.

The bank recorded a net loss of Bt20.69 billion for the first nine months of the year, against Bt4.61 billion in net profit in the corresponding period last year.

The Nation