Recap. On 21 July, Kurnia Asia (KAB) announced that it has obtained the approval of Bank Negara Malaysia (BNM) to commence preliminary negotiations with parties interested to acquire (KIMB). As highlighted in our previous reports, the company has received expressions of interest from several foreign parties to explore the possibility of acquiring equity interest in its 100%-owned subsidiary, KIMB. However, no names were disclosed.
Foreign suitors identified? Local insurance companies are attractive M&A targets for foreign players since BNM relaxed the foreign ownership limit to 70% from 49%. US-based Liberty International Holdings Inc and Chartis Malaysia Insurance are believed to be eyeing KIMB. Another potential bidder for the stake is said to be Insurance Australia Group (IAG), which holds a 49% stake in AmBank Group’s general insurance arm, AmG Insurance. German insurer Allianz Group is also suspected to be another possible buyer of KIMB.
Maintain Trading Buy. The RM0.68 potential book value of KAB after a possible sale of KIMB represents a short term target for the share price. We believe the impending M&A will boost the company’s share price in the near term.
Foreign suitors identified? Local insurance companies are attractive M&A targets for foreign players since BNM relaxed the foreign ownership limit to 70% from 49%. US-based Liberty International Holdings Inc and Chartis Malaysia Insurance are believed to be eyeing KIMB. Another potential bidder for the stake is said to be Insurance Australia Group (IAG), which holds a 49% stake in AmBank Group’s general insurance arm, AmG Insurance. German insurer Allianz Group is also suspected to be another possible buyer of KIMB.
Maintain Trading Buy. The RM0.68 potential book value of KAB after a possible sale of KIMB represents a short term target for the share price. We believe the impending M&A will boost the company’s share price in the near term.
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