Bangkok--1 Mar--Kiatnakin Bank
Kiatnakin Bank Public Company Limited and Phatra Capital Public Company Limited confirm their merger upon the completion of due diligence. Kietnakin Bank will make a non-cash tender offer to purchase all shares in Phatra at the swap ratio of 1 share of Phatra for 0.9135 share of the Bank. This merger will enhance competitiveness and create additional value from joint development of new business opportunities by leveraging management expertise, strength, and leading position in specialized areas in commercial banking ,investment banking and capital market.
The Board of Directors Meetings of both Kiatnakin Bank Public Company Limited (“ The Bank”) and Phatra Capital Public Company Limited (“Phatra”) on February 27, 2012 approved to propose the merger plan between the Bank and Phatra to shareholders at ordinary general meeting in April. The merger between the Bank and Phatra is to jointly operate the financial businesses, consisting of commercial banking, securities, capital market and other supporting businesses. The Bank will make a tender offer to purchase all shares from all of Phatra’s shareholders at ratio of 1 Phatra share for 0.9135 share of the Bank and subsequenctly delist Phatra’s Share from the Stock Exchange of Thailand (the “SET”) under the condition that at the end of the tender offer period, Phatra’s share accepting the tender offer shall not represent less than 75 percent of the total number of paid-up shares of Phatra.
After the completion of the merger the Bank and Phatra will jointly operate both existing and new businesses in commercial banking ,investment banking, and capital market to enhance the economic value of the group by fully utilized each company strengths to achieve the ultimate benefit of all entity. The operation of commercial banking business will be governed by the Board of Directors of the Bank, consisting of 15 directors - 6 independent directors and 3 representatives from Phatra, and the operation of investment banking and capital market business will be operated and/or owned by Phatra. The Board of Directors of Phatra will consist of 13 directors - 4 independent directors and 3 representatives from the Bank.
Mr. Supol Wattanavekin, Chairman of Kiatnakin Bank Public Company Limited, said “After entering into the Memorandum of Understanding between the Bank and Phatra, both parties have been proceeding due diligence. The result was that there was no issue or data which materially impacted the business operations and financial positions of both parties. Therefore, the Board of Directors of the Bank resolved to approve the merger between the Bank and Phatra and will propose the merger plan to shareholders’ meeting for further approval.”
Mr. Supol elaborated that “Kiatnakin Bank and Phatra are each highly competitive and have considerable expertise in their respective lines of business. Kiatnakin Bank is one of the leading financial institutions for leasing and hire-purchase lending services, which have enjoyed high growth rates, and it is experienced in loans for medium-sized and small-sized companies including real estate operators. Phatra Capital and Phatra Securities Public Company Limited (“Phatra Securities”) are one of the leading market players for the comprehensive securities services, including institutional securities brokerage, private wealth management, investment banking, principal investment business, and derivatives business. After the merger, both Kiatnakin Bank and Phatra will use their former names in operating their businesses to utilize the brand equity and image of both companies, which consists of different customer bases. We aim to become the leader in Specialized Commercial and Investment Bank.”
Mr. Banyong Pongpanich, Chairman of Phatra Capital Public Company Limited, said about this merger that “after the completion of the due diligence, of which no material issues were found, the Board of Directors of Phatra resolved to approve the merger between the Bank and Phatra. This merger will increase business opportunities by combining their business capability to elevate business competitiveness and ability to accommodate the growth in all sectors of Thailand’s macro economy. Furthermore, the merger will allow both company to effectively response to the dynamic development of the capital market and also be beneficial to the clients, employees, and shareholders of both parties. Under the Kiatnakin-Phatra platform, Phatra will be able to offer a more variety of products and services to meet clients’ demands in both investment banking and private client/wealth management area. More channels for financial products via the Bank’s distribution networks will allow Phatra to expand its scale. Also, Phatra will have stronger capital base, while the Bank will be better equipped with a more complete spectrum of financial and capital markets instruments to immediately compete as well as having better diversified income base. Most importantly, the merger will be accretive to the Bank’s earnings particularly in the medium and long term. After the Board’s resolution, major shareholders of Phatra, Phatra, Kiatnakin Bank and major shareholders of Kiatnakin Bank jointly signed the share purchase agreement.”
Mr. Banyong added that “Even though the merger is still subjected to each entity’s shareholders’ resolution and approval from relevant regulators, along with the tender offer process which is expected to be completed by the 3rd quarter of 2012, the Bank and Phatra have already started to formulate synergies realization plan to ensure the success of the transaction, to achieve optimum synergies, and to setup business strategy for long term sustainable growth.