Bangkok Bank, Astra and Standard Chartered signed a conditional purchase agreement that will divest 89 percent of the shares in Bank Permata to Bangkok Bank on Thursday. (ID Photo/David Gita Roza)

Astra Shares Soar as Permata Divestment Set to Bring In $1.3b in 2020


DECEMBER 13, 2019

Jakarta. Shares of Astra International, Indonesia's largest automotive conglomerate, jumped to a month-high on Friday after Bangkok Bank, one of the largest of Thailand's commercial banks, announced its plan to acquire 89 percent of the shares in Astra's subsidiary Bank Permata for about $2.7 billion by the end of third quarter next year.

Bangkok Bank, Astra and Standard Chartered, the London-based lender that owns as many shares as Astra in Permata, signed the conditional purchase agreement (CSPA) for the acquisition on Thursday, marking the beginning of an end to Astra's and Standard Chartered's years of efforts to find suitors for Permata. 

Astra, which controls 44.6 percent of Permata, stands to pocket Rp 18.7 trillion ($1.3 billion) from the deal.

Astra's shares rose 3.8 percent to Rp 6,800 apiece at the end of the morning session of trading at the Indonesia Stock Exchange (IDX).  

The deal valued Permata at Rp 1,498 per share, putting a 14 percent premium over the bank's closing price on Thursday. In total, Bangkok needs to pay Rp 37.4 trillion for the acquisition or 1.77 times Permata's book value.

Tira Ardianti, Astra's head of investor relations, said all proceeds from the divestment will be spent on the company's investment.

Chartsiri Sophonpanich, the president director of Bangkok Bank, said the purchase would be subject to approval from the lender's shareholders and the regulators in Indonesia, but he was sure Bangkok Bank would secure their support. 

The acquisition is part of an international expansion and Bangkok Bank's main strategy.

Bangkok Bank has more than 17 million customer accounts and nearly 1,200 branches throughout Thailand with total assets of $105 billion at the end of last quarter. It has been operating in Indonesia since 1968, and now has three branches in Jakarta, Surabaya and Medan. 

For the deal to go through, Indonesian authorities will require Bangkok Bank to merge Permata with its local operation. A majority takeover like this one also requires a mandatory tender offer for the remaining 10.8 percent of shares in Permata owned by the public.