Japan’s SMBC in talks with TPG to buy Indonesia bank stake – report
Sumitomo Mitsui Banking Corp (SMBC) is said to be in advanced talks to buy 40% of TPG Capital's stake in Indonesia’s Bank Tabungan Pensiunan Nasional (BTPN). The sale would enable the private equity firm to comply with the 40% cap on foreign ownership of domestic banks, which was introduced last year.
TPG and Northstar Pacific Partners, an Indonesian GP with strong ties to its US counterpart, jointly acquired a majority stake in the bank for $200 million in 2008. BTPN's market value has since grown to $3.1 billion, making it Indonesia's seventh-largest bank, with more than 19,000 employees and over 10,000 branches.
The two PE firms agreed to a five-year lock-up when they acquired the stake and subsequently took the bank public. This expired in March and the firms have since held talks with Japanese banks Mitsubishi UFJ and Mizuho, in addition to SMBC.
TPG's stake is currently valued at $1.2 billion, according to Reuters. It expects a 25% premium over the current market price, which implies a deal worth $1.5 billion, with a 5x price-to-book multiple.
TPG's holding was reduced to 58.5% after a rights offering in 2010. It was not immediately clear what the private equity firm plans to do with the remaining 18.5%, although it has the option of selling shares on the open market.
The private equity firm has a track record for successful deals in Asia's banking sector, having previously invested in Korea First Bank and Shenzhen Development Bank. It is also reportedly looking to sell Shanghai-based finance and leasing company UniTrust for $800 million.
TPG is currently in the middle of fundraising for its latest pan-regional fund, TPG Asia VI, which has a target of $4 billion.
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