11 May 2012
ECM Libra and Kenanga merger finalised and to be announced soon?
The widely-speculated merger between the two stand-alone investment banks, ECM Libra Financial Group Bhd and K&N Kenanga Holdings Bhd, has been finalised and will be announced soon, according to banking sources.
The merger, first speculated by a financial weekly last year, will likely see Kenanga issuing cash and shares for the assets of ECM Libra.
In February, StarBiz reported that Kenanga was close to an agreement to buy the investment banking and broking unit of ECM Libra for about RM900mil.
It has been reported that ECM Libra's major shareholders, including Tan Sri Azman Hashim with 23.85% stake, have been looking to sell their sharess at the right price.
Azman, who is also the chairman of AMMB Holdings Bhd, emerged as ECM Libra's single largest shareholder in 2007 after acquiring 128 million shares for RM102mil.
The acquisition increased his stake in the investment bank to about 22% then. The sale will enable Azman to meet licensing rules that bar a single individual from being a key owner of more than one investment bank.
Concurrently, ECM Libra co-founders Lim Kian Onn and Datuk Seri Kalimullah Masheerul Hassan, who own 9.48% and 3.97% respectively, are also said to be open to selling their stakes.
Lim is currently ECM Libra's group director while Kalimullah is chairman.
Separately, Cahaya Mata Sarawak Bhd (CMS), which is Kenanga's largest shareholder, is said to be keen on driving Kenanga. CMS has a 25.07% stake in Kenanga and is sitting on a huge cash pile after the recent completion of the sale of interest in UBG Group to Petro Saudi International.
ECM Libra, which has a market capitalisation of about RM669mil, is currently the country's 10th biggest broker by trading volume year-to-date, according to Bursa Malaysia's website.
Kenanga is the seventh largest equities broker by trading volume so far this year.
ECM Libra rose 0.5 sen to 81 sen while Kenanga was down 2.5 sen to 56.5 sen in thin trading yesterday.
For the financial year ended Jan 31, 2012, ECM Libra posted a net profit of RM31.5mil against RM65.2mil in the previous corresponding period.
Its revenue for the period fell in tandem to RM178.2mil from RM218.3mil previously.
Malaysian banks and brokerages have been merging amid increased competition from foreign lenders.