Will Maybank still buy Bank Internasional after takeover block?

PT Bank Internasional Indonesia shares were suspended in Jakarta after Malayan Banking's $2.7 billion bid to buy the Indonesian company was blocked by the Malaysian central bank.

Bank Internasional's shares have risen 61 percent this year, making it Indonesia's second-best performing banking stock on speculation it will be sold by Temasek Holdings. They fell 3.2 percent to 460 rupiah in Jakarta on July 29.

Malaysia's central bank revoked its approval for the purchase, saying a new Indonesian takeover law may trigger losses at the Kuala Lumpur-based lender. Maybank had agreed to pay 4.7 times book value for Bank Internasional, Indonesia's fifth-largest financial services company, which posted a 32 percent decline in second-quarter profit.

“Some of the takeover premium would be removed from the stock,” said Raymond Gin, director of investment at Jakarta-based PT Manulife Asset Management, which oversees about $1.2 billion. “I would expect investors to sell.”

The exchange, which announced the trading halt in an e-mailed statement, didn't say when the suspension will be lifted.

“The shares will now have to reflect a fundamental valuation,” Joshua Tanja, an analyst with UBS AG, said in a note to investors. “We place our rating, price target and earnings under review.”

Bank Internasional's second-quarter profit fell to 118.7 billion rupiah from 174.2 billion rupiah a year earlier. The figures were derived by subtracting first-quarter earnings from six-month results released on June 28.

Net income in the six-months ended June 30 rose to 316 billion rupiah ($35 million) from 290 billion rupiah a year earlier. Net interest income rose 17 percent to 1.4 trillion rupiah.

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