The Group announced yesterday that ANZ Funds Pty Ltd, a wholly-owned subsidiary of Australia and New Zealand Banking Group Limited, hasgiven notice to exchange its entire holding of RM575mn nominal value 10-year unsecured subordinated exchangeable bonds into new AMMB
Holdings shares.
Pursuant to this, the Group has allotted 194,915,254 new shares to ANZ
Funds and which will see its shareholding increase from the present
19.2% to 24.6%, prior to the proposed special issue of 96,300,000 new
AMMM Holdings shares to Bumiputera shareholders which is pending
completion. ANZ’s final equity interest will be diluted to 23.8% upon
completion of the proposed special issue. The paid-up capital of AMMB
Holdings will increase to RM2,917,884,844, prior to the special issue.
Comments
The move certainly solidifies ANZ’s participation in the Group, and is a
clear sign of its confidence in the Group’s brightening prospects. Concerns regarding its weaker asset quality are a thing of the past, we
believe, as it has been exhibiting operational improvements over the
recent quarters since the entry of the ANZ Group. We are putting our
target price under review pending the release of its 1QFY10 results, which is expected on August 10th. While we continue to like the prospects of the
Group, which remains one of the more undervalued banking groups on a
P/E and P/B basis, we must however make mention that share price
upside going forward will not mirror its year-to-date performance as it now trading close to its long-term P/B average.
Recommendation >>> BUY ON DIP TP RM4.35
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