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Mon 6 Jun 2011 11:36 AM

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ADCB's RHB auction unaffected by planned Maybank, CIMB bids

UAE bank’s 25% stake sale in Malaysian lender not to be hit by bidding war between Maybank, CIMB

ADCB's RHB auction unaffected by planned Maybank, CIMB bids
STAKE SALE: Abu Dhabi Commercial Bank is selling its 25 percent stake in RHB

Abu Dhabi
Commercial Bank (ADCB) is proceeding with the auction of its stake in Malaysian
bank RHB and won't let planned bids by lenders Maybank and CIMB for RHB derail
the process, a source with direct knowledge of the matter said on Monday.

RHB,
Malaysia's fifth-largest lender with a $7.3bn market value, is set to be the
subject of a bidding war between rivals Maybank and CIMB, in what could be
Asia-Pacific's fourth-biggest banking deal ever.

ADCB is
selling its 25 percent stake in RHB and an earlier auction had drawn interest
from Japan's Sumitomo Mitsui Financial Group (SMFG) and Carlyle , according to
sources.

The interest
by Maybank and CIMB, Malaysia's top two lenders, had cast doubt on ADCB's
auction, but the source said it would proceed.

"A sale
is a sale," said the source, who declined to be named because of the
sensitivity of the matter.

"The
process itself, at the end of the day, is ADCB is obviously going to gravitate
to a price that makes sense for them whether it's from the local guys or from
the foreign guys. In theory if the locals are buying control they should be
paying more. In that respect it's the same, no conflict," the source said.

Analysts
have said that bidders for ADCB's stake may be less keen on the 25 percent
block of RHB shares if RHB is to be absorbed into a much bigger entity.

Foreign
players interested in ADCB shares were looking to play a more substantial role
in the Malaysian banking sector, but a merger with Maybank or CIMB would dilute
their shareholding.

ADCB
declined to comment when contacted by Reuters.

Sources had
earlier said that Maybank has hired Japanese investment bank Nomura to advise
on its takeover bid while RHB Capital has engaged Credit Suisse as an adviser.

RHB shares
were down half a percent at 9.93 ringgit by the midday break, compared with the
broader market's 0.3 percent drop.

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