IBA shares soar on Malaysian bid
By Alex Frew McMillan
HONG KONG, China (CNN) -- Stock in International Bank of Asia Ltd. (IBA) soared on Tuesday after Malaysia-based Hong Leong Bank entered the running to buy control of the bank.
Arab Banking Corp. is looking to sell its 55 percent stake in IBA, whose stock was suspended on Monday pending an announcement.
IBA shares started changing hands again on Tuesday and closed up 13.5 percent at HK$2.95, after a 7 percent leap ahead of the suspension on Monday.
Hong Leong, headed by tycoon Quek Leng Chan, said it was in the early stages of talks with IBA and was also looking for approval from Malaysian regulators.
"At this juncture, the discussions are at a preliminary stage and no terms, including as to price, have been agreed," Hong Leong said in a statement to the Kuala Lumpur stock exchange.
A former Hong Kong bank owner
Hong Leong is the sixth-biggest bank in Malaysia. Quek is also chairman of the financial-services company the Guoco Group, which sold its 71 percent controlling stake in Hong Kong's Dao Heng Bank to Singapore-based DBS Group in 2001.
A local Malaysian business magazine reported that Hong Leong was considering bidding in the range of HK$3.70 to HK$4.00 a share for the IBA stake.
At HK$4 per share, Bahrain-based Arab Banking's stake would be worth around HK$2.6 billion ($333 million).
Hong Kong financial services company China Everbright is also looking to sell its 20 percent stake in IBA. But it says it will wait until Arab Banking finds a buyer for its holding.
Hong Kong's battered economy and rising bankruptcy rates have left its financial industry in trouble. IBA, one of the city's smaller institutions, with just 36 branches, reported a 38 percent fall in net profit for the first half of the year.
