UAE's Mubadala said to mull options for $920m RHB stake

Sources says fund has held informal discussions over stake in Malaysia's fourth biggest lender
By Bloomberg
Fri 12 Jan 2018 11:11 AM

Abu Dhabi sovereign fund Mubadala Investment Co is exploring options for its stake in RHB Bank, Malaysia’s fourth-biggest lender, including a possible sale, people with knowledge of the matter said.

Mubadala has held informal discussions with potential advisers to seek suggestions on its 17.8 percent holding in RHB Bank, according to the people.

The fund sees its RHB Bank holding as non-core and is considering options for the stake as part of a broader review of its portfolio, one of the people said, asking not to be identified because the information is private. Mubadala’s stake is worth about 3.66 billion ringgit ($920 million) based on Thursday’s closing price.

The Abu Dhabi fund’s Aabar Investments unit is the second-biggest shareholder in RHB Bank, according to data compiled by Bloomberg. It trails only Employees Provident Fund, Malaysia’s biggest pension fund, which owns 40.7 percent. Deliberations are at an early stage, and there’s no certainty they will lead to a transaction, the people said.

Mubadala, whose portfolio is valued at about $127 billion, inherited the RHB investment through a combination with fellow sovereign fund International Petroleum Investment Co that was finalized last year. It has been reviewing some of the assets it gained through that merger, people familiar with the matter said in November. Mubadala has been working with consulting firm AT Kearney Inc on options including asset sales and mergers within the portfolio, the people said at the time.

“We are regularly reviewing our portfolio for opportunities that make sense for the best financial outcome,” a Mubadala spokesman said. A representative for RHB Bank said she couldn’t immediately comment.

A deal could mark an end to a near decade-long investment in RHB Bank from the oil-rich Gulf emirate. Government-owned Abu Dhabi Commercial Bank first bought into a precursor of RHB Bank in 2008. It sold those shares to IPIC’s Aabar Investments arm in 2011.

Abu Dhabi first announced plans in 2016 to combine Mubadala and IPIC as part of the country’s investment strategy to weather a slump in oil prices. The merged entity ranks as the world’s 14th-largest fund, according to the Sovereign Wealth Fund Institute.

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