Jun 22, 2010

Mu'Min Gunawan cancels Panin sale

It is only God and Mu'min Ali Gunawan who precisely know when the right time for PT Bank Pan Indonesia Tbk (Bank Panin) to be sold.  
So, when you see Mu'min cancels the sale, it is not an extraordinary thing. Mu'Min has canceled many times the sale of Bank Panin. The main reason is always lower price offer.
As reported by Reuters today, Indonesia's Mu'min Ali Gunawan, which controls Bank Panin has called off plans to sell its 46% stakes with a current market value at $1.3 billion after lower-than-expected bids, two sources said.
The sources, as reported by Reuters today, who have direct knowledge of the deal, said the family had expected offers over 3 times book value but the bids came in much lower, prompting them to defer the sale.
The sources declined to be named as they are not authorised to speak to the media.
Bank Panin, now the seventh-largest Indonesian bank with a market value of $2.8 billion, is regarded as attractive since it is one of the few banking assets up for grabs in a fast-growing market. 
Fitch Ratings recently painted a rosy outlook for Indonesian banks, despite a somewhat crowded marketplace.
But the recent freeze in global debt markets and uncertainty over the health of the global economy forced bidders to turn more conservative, one of the sources said. Another Asian bank on the block, Korea Exchange Bank has also not drawn much interest.
A report on Monday said private equity fund MBK Partners was the sole bidder for the asset, which was also considered by by Australia and New Zealand Banking Group and Standard Chartered.
One source said ANZ, which already owns 38.5 percent of Panin, and Standard Chartered were among three firms that put in indicative bids for Panin.
Analysts were quick to point out that without a takeover, Panin's share price premium will deflate as it is overvalued based solely on fundamentals.
"We doubt that the controlling Gunawan family will find a buyer at a price it would find acceptable," Standard Chartered analyst John Caparusso said in a note. "Should no takeover transpire, we think Panin is overvalued relative to its weak underlying earnings power."

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