Attempts by Gulf shareholders to sell a majority stake sale in Indonesian Islamic lender PT Bank Muamalat have hit a snag after frontrunner Qatar Islamic Bank pulled out of the bidding process, banking sources said.
Top shareholders of Indonesia’s second-biggest sharia lender are aiming to sell at least 51 percent of the unlisted Islamic lender in a deal that may be worth about $300 million, sources said.
But the deal, which initially attracted interest from several parties, has seen bidders pull back due to high pricing expectations from the sellers, sources familiar with the deal said.
Qatar Islamic Bank (QIB) was seen as a front-runner for the stake, two bankers familiar with the stake sale process said.
QIB was concerned about the price they would have to pay for the stake, one of the sources said.
A QIB official declined to comment. The sources declined to be identified because the deal is not public.
That has left Standard Chartered Plc as the only bidder left in the race and the top contender for the stake. StanChart’s Indonesian affiliate PT Bank Permata pulled out earlier, sources said.
Bank Mandiri and Singapore’s second-biggest lender Oversea-Chinese Banking Corp have also withdrawn from the bidding process, according to the sources. Both OCBC and Mandiri have declined to comment.
Muamalat’s top three shareholders — Islamic Development Bank, Boubyan Bank Kuwait, and Saudi Arabia’s Atwill Holdings Ltd – collectively control 75.7 percent of the lender and are trying to offload some or all of their holdings.
Morgan Stanley is advising the shareholders on the sale. Muamalat’s total assets are 21.4 trillion rupiah ($2.5bn).
A sale may value the lender at between $750 million to $1 billion, sources have said previously.
Indonesia, the world’s most populous Muslim nation, has a huge untapped market for Islamic banking, which local and international investors are trying to capture.
Qatar National Bank last year bought an 82 percent stake in small local lender Bank Kesawan for $82m.
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