by P PREM KUMAR / Pic by ISMAIL CHE RUS

RETIREMENT Fund Inc (KWAP) is unlikely to acquire a stake in AMMB Holdings Bhd worth RM4 billion from Australia and New Zealand Banking Group Ltd (ANZ) following the collapse of the proposed merger with RHB Bank Bhd.

The country’s second-largest pension fund was planning to acquire the ANZ’s stake in the merged AMMB-RHB Bank entity, which would give the retirement fund a sizeable interest in a banking group with RM368 billion in assets.

KWAP CEO Datuk Wan Kamaruzaman Wan Ahmad (picture) said presently there is no discussion on KWAP to acquire ANZ’s 24% stake in AMMB.

“No such proposal yet to acquire the ANZ stake in AMMB,” he told The Malaysian Reserve when contacted yesterday.

AMMB and RHB Bank on Tuesday announced that the merger talks between both lenders were scrapped after both parties failed to reach mutually acceptable terms. Both banks did not elaborate further.

The market is speculating that valuation could be one of the reasons behind the collapsed deal. Both RHB Bank and AMMB have substantial foreign shareholders.

They purchased the interest in the lenders at a higher price compared to the current trading levels, forcing them to seek other buyers or take a sizeable loss if they decide to exit their investments.

ANZ is currently the single-largest shareholder in AMMB with 24% interest. If the proposed merger had gone through, ANZ’s stake would have thinned to about 11% in the enlarged banking group. Abu Dhabi-based Aabar Investment PJS has a 17.75% interest in RHB. ANZ, Australia’s fourth-largest lender, had said it wants to dispose businesses in South-East Asia and to focus on its home market.

But seeking a buyer for such a substantial stake will be difficult, especially with the high capital injection requirements and the competitive Malaysian banking market.

ANZ sold its fleet finance operations and the stake in Shanghai Rural Commercial Bank Co this year after disposing of other retail and wealth-management businesses in Asia last year.

ANZ is also selling its stake in Chinese lender Bank of Tianjin Co, as well as its 39% stake in Jakarta-based lender PT Bank Pan Indonesia.

AMMB and RHB received the nod from Bank Negara Malaysia to commence exclusive merger negotiations in early June.

The proposed exercise would be an all-share merger. The two lenders were given until Aug 30 to exclusively discuss the deal.

KWAP has a 3.05% stake in AMMB and 3.94% interest in RHB, according to Bloomberg’s data.

KWAP manages RM134 billion worth of funds. Presently, the fund’s single biggest shareholding is in Bursa Malaysia Bhd with a 19.5% stake.