Oversea-Chinese Banking Corp of Singapore and CIMB of Malaysia are considering bidding for General Electric's $1.6-billion stake in Thailand's Bank of Ayudhya Plc (BAY), according to three sources with knowledge of the matter.
The two lenders have signed non-disclosure agreements that allow them to examine in closer detail the accounts of the Thai bank, said the sources, asking not to be identified as the process is private.
US-based GE's finance unit currently owns 25% of BAY, the country's fifth-largest lender, after selling a 7.6% stake to institutional investors last month. It said at the time that it was reviewing strategic options for its remaining holding.
GE would not sell any more shares through the market for 180 days unless it relates to a strategic sale, BAY said on Sept 26.
"There has been significant interest from investors in the bank arising from its strong business performance so we undertook the block sale," GE Capital said in a statement on Friday.
"The company continues to review strategic options for its remaining interest in BAY, and we cannot comment on market speculation about any external interest in this."
Malayan Banking Bhd (Maybank), Malaysia's biggest lender, would be interested in one-on-one discussions with GE about its BAY stake, though it doesn't want to compete with other bidders, one person familiar with the matter said. Maybank has not signed a non-disclosure agreement, this person said.
Maybank announced on Friday that it was seeking about 2.64 billion ringgit ($865 million) in a private placement of shares, to strengthen its capital and support growth objectives.
Koh Ching Ching, a Singapore-based spokeswoman for OCBC, declined to comment, as did executives at CIMB and Maybank.
OCBC, Southeast Asia's second-largest lender, is vying with Singapore-based rivals to expand into other parts of Asia. The company generated 82% of its pretax income from Singapore and Malaysia in the second quarter, data compiled by Bloomberg show.
Kuala Lumpur-based CIMB, which already owns a CIMB Thai Bank Plc, is also seeking to extend its regional reach after being Malaysia's top underwriter for equity and rights offerings in the past three years, according to data compiled by Bloomberg.
CIMB agreed in April to buy most of the Asia-Pacific investment banking operations of Royal Bank of Scotland Group Plc.
Formed in 1945 and listed on the SET in 1977, Bank of Ayudhya has counted GE as its top shareholder since 2007.
That investment preceded at least eight takeovers by the Thai bank, including purchases of businesses from GE, American International Group and HSBC Holdings.
Those deals have turned Bank of Ayudhya into Thailand's top or second-ranked provider of credit cards, car loans and personal finance, bank filings show.
Shares of BAY closed yesterday on the Stock Ecchange ofn Thailand at 32.25 baht, up 75 satang, in heavy trade worth 988.42 million baht.