The Japanese bank Mitsubishi UFJ Financial Group agreed on Tuesday to buy up to a 75 percent in the Thai lender Bank of Ayudhya for around 560 billion yen ($5.6 billion).
Under the terms of the deal, Mitsubishi UFJ Financial, one of Japan’s largest banks, will offer investors in Bank of Ayudhya 39 Thai bhat ($1.26) for each of their shares in the Asian country’s fifth largest lender. The offer represents a 5.4 percent premium on the firm’s closing price on Tuesday.
Mitsubishi UFJ Financial said it already had received backing from GE Capital, which will sell its 25 percent stake in Bank of Ayudhya in the proess. Mitsubishi UFJ said it would use the investment to expand its existing presence in the fast growing economy.
The Japanese lender said it was in talks to combine its own Thai operations with those of Bank of Ayudhya, whose other major shareholder, Ratanarak Group, would retain its current 25 percent stake in the Thai bank. Mitsubishi UFJ Financial’s share price rose 1.3 percent by the end of trading in Tokyo on Tuesday.
Bank of Ayudhya reported a 58 percent jump, to 14.6 billion Thai bhat, in its net income last year, as the Asian country’s gross domestic product increased by 6.4 percent in 2012.
The tender offer is expected to be start in November, and will close by the end of the year, according to a statement from Mitsubishi UFJ Financial.
