Malaysia’s Public Bank To Buy Late Founder’s Stake In Insurance Company For $400 Million



Public Bank ( 1295 ) to acquire 44.15% stake in
LPI Capital (8621) for RM1.72 bil cash



Public Bank Bhd (1295)

Ex-Dividend Date	Dividend	Payment Date	Yield
Sep 10, 2024	0.10	Sep 23, 2024	4.17%
Mar 13, 2024	0.10	Mar 22, 2024	4.41%

LPI Capital (8621)

Ex-Dividend Date	Dividend	Payment Date	Yield
Sep 04, 2024	0.30	Sep 13, 2024	5.22%
Mar 11, 2024	0.40	Mar 20, 2024	5.21%

**Company Name**	PUBLIC BANK BERHAD
**Company Registration No.**	0006463H / 196501000672
**Nature of Business**	ENGAGED IN ALL ASPECTS OF COMMERCIAL BANKING AND THE PROVISION OF RELATED FINANCIAL SERVICES
**Date of Registration**	1965-12-30
**State**	WILAYAH PERSEKUTUAN

**Company Name**	LPI CAPITAL BHD.
**Company Registration No.**	0004688D / 196201000175
**Nature of Business**	INVESTMENT HOLDING
**Date of Registration**	1962-05-24
**State**	WILAYAH PERSEKUTUAN

Company Name	PUBLIC ISLAMIC BANK BERHAD
Company Registration No.	0014328V / 197301001433
Nature of Business	ISLAMIC BANKING AND THE PROVISION OF RELATED FINANCIAL SERVICES
Date of Registration	1973-07-05
State	WILAYAH PERSEKUTUAN

Oct 10, 2024

Public Bank Bhd (PBB)—Malaysia’s second-largest lender by market value—said Thursday it is buying a 44.15% stake in LPI Capital from the family of its late founder Teh Hong Piow for 1.72 billion ringgit ($400 million).

The bank will pay 9.80 ringgit for each LPI Capital share held by Teh’s family and their investment vehicle Consolidated Teh Holdings, representing a 25% discount to the last traded price of Lonpac Insurance’s parent before trading was suspended on Wednesday.


The transaction will require Public Bank to buy the rest of LPI Capital. PBB shares dropped 4.8% to 4.35 ringgit, while LPI shares slipped 3.2% to 12.58 ringgit in late morning trading on Friday in KuaLa Lumpur.


“The proposed acquisition represents an opportunity for PBB to further expand its general insurance segment through the LPI Group’s platform,” Public Bank said in a regulatory filing. The deal would also help the lender achieve its goal of becoming a universal bank offering comprehensive financial services to its customers.

Separately, the estate of PBB’s late founder (who passed away in 2022 at the age of 92) plans to sell a portion of their shares in Public Bank shares over a five-year period, his daughter, Teh Li Shian, was quoted as saying in local media reports.


The family, along with its investment firm CONSOLIDATED TEH HOLDINGS SDN. BHD. , owns about 22% stake of the bank. That accounts for the bulk of their net worth of $5.4 billion, making them the third richest family in Malaysia, according to the list of Malaysia’s 50 Richest published by Forbes Asia in April.

The late Teh Hong Piow founded Public Bank in 1966 and served as the bank’s CEO until 2002 when he was appointed chairman.


The self-made billionaire started his banking career as a clerk at Oversea-Chinese Banking Corp. in Singapore in 1950.


With our existing network of over **** 260 branches located throughout the country, ******* LPI Group would be able to leverage and expand its distribution channels and further grow its general insurance business in Malaysia. In addition, we would also be able to tap into the sales and distribution network of LPI and further expand our reach to cover clients and customers of LPI.


*******************************
At the same press conference, Teh Li Shian Diona, the youngest daughter of the late Tan Sri Dato’ Sri Dr. Teh Hong Piow also announced that the Estate and ConTeh intends to undertake a restricted offer for sale (“ROFS”) of a portion of their Public Bank Shares, progressively over a 5-year period and will be in compliance with the Financial Services Act.
*******************************

Public Bank



Diona Teh said, “My father often said that the success of Public Bank was not his alone – it is built on the trust and loyalty of its shareholders and the relentless commitment of its employees, or as he would like to call them his “corporate family”.


******* “To honour his legacy and to show our deep appreciation and gratitude, we will be undertaking an exercise to distribute a portion of our Public Bank shares at a discount to all employees, directors and eligible shareholders of the Public Bank Group.
*******

This initiative aims to ensure that Public Bank remains in the hands of those who have nurtured its growth and success over the years, enabling us to continue building our legacy together.”

She further added that, “Although we will be streamlining our stake, I would like to take this opportunity to reiterate our firm and unwavering commitment to continue as the major shareholders of Public Bank.


This is not just a role or title for us – it is an honour and a responsibility that we deeply cherish. We are devoted to upholding my father’s legacy and continuing the stewardship of this esteemed institution.”

“For this, we are deeply grateful to Bank Negara Malaysia and the Ministry of Finance for their trust in us by granting us the approval to continue helming Public Bank. With their support, we will perform our utmost best to lead Public Bank with the same passion, integrity, and vision that has defined the PBB group thus far.”



A decade later, Teh joined Malayan Banking where he rose through the ranks to become general manager at age 34.
































Tan Sri Azman Hashim (age 85) holds three billion, nine hundred ten million, six hundred ninety thousand, thirty-one shares in AmBank Bhd, equivalent to 11.83%.




Teh was allowed to hold 23.4%, which is way above the threshold of 10%, because of the “grandfather rule”.

Under the rule, those who already had an interest exceeding the threshold when the FSA came into effect in 2013 do not need to comply with it.




This post has been edited by plouffle0789: Oct 12 2024, 11:42 PM

Public Bank Bhd (PBB) is purchasing a 44.15% stake in LPI Capital from the family of its late founder, Teh Hong Piow.


The stake is being sold by the family and their investment vehicle, Consolidated Teh Holdings, for 1.72 billion ringgit ($400 million).


This means that Teh's family is selling the stake to PBB (LPI Capital is also owned by the family through Consolidated Teh Holdings).

The transaction will prompt PBB to acquire the remaining shares of LPI Capital.

********* PBB is also owned by the family through Consolidated Teh Holdings, which holds a 22% stake in the bank. *******




Teh's Family & Consolidated Teh Holdings
↓
Ownership
↓
44.15% stake in LPI Capital

And

22% stake in Public Bank Bhd (PBB)

-------------------------------------------------------------------


PBB
↓
Purchases
↓
44.15% stake in LPI Capital from Teh's family & Consolidated Teh Holdings


Transaction Outcome:

PBB acquires full ownership of LPI Capital

Teh’s family retains a 22% stake in PBB


Explanation:

Teh's Family owns stakes in both LPI Capital (through Consolidated Teh Holdings) and Public Bank Bhd (PBB).

The 44.15% stake in LPI Capital is sold to PBB for 1.72 billion ringgit.

After this purchase, PBB will be required to acquire the remaining shares of LPI Capital.

Even though Teh's family is selling its stake in LPI Capital, they will still hold a 22% stake in PBB through Consolidated Teh Holdings.

This post has been edited by plouffle0789: Oct 12 2024, 11:36 AM

Since Public Bank Bhd is purchasing the stake in LPI Capital using cash (1.72 billion ringgit), the cash reserves of Public Bank Bhd will be reduced.


There was no mention of a share exchange between LPI Capital Bhd and Public Bank Bhd in the transaction.

This post has been edited by plouffle0789: Oct 12 2024, 11:11 AM

Teh family have 44.15 % stake in LPI.

They can appointed one of them into board of director but they do not request......

Company Name	PUBLIC ISLAMIC BANK BERHAD
Company Registration No.	0014328V / 197301001433
Nature of Business	ISLAMIC BANKING AND THE PROVISION OF RELATED FINANCIAL SERVICES
Date of Registration	1973-07-05
State	WILAYAH PERSEKUTUAN

Since 1973 existed lah.....

Singapore-based Oversea-Chinese Banking Corporation (OCBC) has made a S$1.4bn ($1.03bn) offer to acquire the remaining shares of insurance company Great Eastern Holdings.

The offer price of S$25.6 per share marks a 36.9% premium over Great Eastern’s last stock close of S$18.7.

This proposed acquisition would increase OCBC's stake in Great Eastern to 100%, up from the current 88.44%.



Ocbc always have at least 80 percent stake in GE...

You can check 10 years ago annual report also

**Name**	**CHEAH KIM LING**
**Position**	Non-Independent Non-Executive Director
**Age**	66
**Memberships of Board Committees**	- Member, Nomination and Remuneration Committee<br>- Member, Risk Management Committee<br>- Member, Compliance Committee
**Academic/Professional Qualifications**	- Bachelor of Accounting (Honours) degree from the University of Malaya<br>- Chartered Accountant of the Malaysian Institute of Accountants
**Relevant Experience**	Ms. Cheah served Bank Negara Malaysia for 32 years, where she was involved in banking regulation, policy formulation, and administration of financial legislations. She also contributed to the development of payment systems, infrastructure, and the promotion of electronic payments.
**Present Directorship(s) in Other Public Companies**	Nil
**Board Meetings Attendance in 2023**	16/16

---------------------------------------------------------

**Name**	**Lee Chin Guan**
**Position**	Non-Independent Non-Executive Director
**Age**	65
**Memberships of Board Committees**	- Member, Nomination and Remuneration Committee<br>- Member, Risk Management Committee<br>- Member, Compliance Committee
**Academic/Professional Qualifications**	- Barrister-at-Law from the Middle Temple, United Kingdom<br>- Bachelor’s Degree in Science (Honours) from the University of Manchester Institute of Science & Technology, England<br>- Degrees in Law from Cambridge University, Oxford University, and Chicago-Kent College of Law
**Relevant Experience**	Mr. Lee has 25 years of experience in legal matters, with 13 years in legal practice, principally in commercial and corporate matters.
**Present Directorship(s) in Other Public Companies**	Public Bank Group:<br>- Director, Public Bank (Hong Kong) Ltd<br>Other Public Companies:<br>- Director, Lonpac Insurance Bhd<br>- Director, Public Financial Holdings Ltd (listed on the Stock Exchange of Hong Kong)<br>- Director, LPI Capital Bhd (listed on the Main Market of Bursa Malaysia)

He is a lawyer....


------------------------------------------------------------------------

**Name**	**THAM CHAI FHONG**
**Position**	Independent Non-Executive Director
**Age**	67
**Memberships of Board Committees**	- Chairperson, Compliance Committee<br>- Member, Nomination and Remuneration Committee<br>- Member, Audit Committee<br>- Member, Risk Management Committee<br>- Member, Board Sustainability Management Committee
**Academic/Professional Qualifications**	- Bachelor of Science (Honours) degree in Mathematics from the University of Malaya<br>- Postgraduate Diploma in Computer Science from University of Malaya
**Relevant Experience**	Ms Tham possesses extensive experience in IT systems, capabilities, and applications from her 26-year tenure in IT functional areas in one of the largest banking groups in Malaysia.
**Present Directorship(s) in Other Public Companies**	Nil
**Board Meetings Attendance in 2023**	16/16

These three directors do not have the 'Chartered Banker of the Chartered Banker Institute (CBI), United Kingdom' qualification, but all three are also directors of Public Bank Berhad.


One is a lawyer, and another is in the IT field.

There are a total of 9 directors at Public Bank Bhd.

Not all have" banker license".


"Member of Asian Institute of Chartered Bankers" ----- Is this your so called banker license?

This post has been edited by plouffle0789: Oct 12 2024, 08:36 PM

**No.**	**Age**
1	57 years old
2	58 years old
3	62 years old
4	65 years old
5	66 years old
6	67 years old
7	72 years old
8	80 years old
9	81 years old

The Public Bank board comprises directors aged 57 to 81 years, highlighting a wealth of experience and expertise.


While older directors bring valuable insights from their extensive backgrounds, concerns about succession planning arise due to the senior age range.


Balancing experience with youthful perspectives is crucial for fostering innovation and adaptability.

1993....

Just 2008 fully owned by public bank Berhad

Public Islamic Bank a wholly owned subsidiary of Public Bank, commenced its operations on 1 November 2008.

Since 1993, Public Islamic Bank has been offering Islamic banking products and services to the public when it started as a window via Public Bank.



We contribute to the Islamic banking field as a whole, focusing on consumer and retail financing, small and medium enterprises as well as financing and deposit taking.

******************************
At the same press conference, Teh Li Shian Diona, the youngest daughter of the late Tan Sri Dato’ Sri Dr. Teh Hong Piow also announced that the Estate and ConTeh intends to undertake a restricted offer for sale (“ROFS”) of a portion of their Public Bank Shares, progressively over a 5-year period and will be in compliance with the Financial Services Act.
*******************************

Public Bank



Diona Teh said, “My father often said that the success of Public Bank was not his alone – it is built on the trust and loyalty of its shareholders and the relentless commitment of its employees, or as he would like to call them his “corporate family”.


******* “To honour his legacy and to show our deep appreciation and gratitude, we will be undertaking an exercise to distribute a portion of our Public Bank shares at a discount to all employees, directors and eligible shareholders of the Public Bank Group.
*******



this is the important things.....



But why they cannot each person hold 5 percent shares?




William Teh Lee Pang

Lillian Teh Li Ming

Lillyn Teh Li Hua

Diona Teh Li Shian

Total 20 percent......


Just sell 2 %




This post has been edited by plouffle0789: Oct 12 2024, 10:22 PM

But why Teh Family cannot each person hold 5 percent shares?


William Teh Lee Pang

Lillian Teh Li Ming

Lillyn Teh Li Hua

Diona Teh Li Shian

Total 20 percent......


Just sell 3.41 %....


The Teh family, through Consolidated Teh Holdings Sdn Bhd and the estate of Teh Hong Piow, holds a 23.41% stake in Public Bank,

making them the largest shareholder of the bank. Based on Public Bank's issued share capital of 19.4 billion shares,


CGS International Securities Malaysia estimates that the Teh family will need to sell 2.6 billion shares.


That accounts for the bulk of their net worth of $5.4 billion, making them the third richest family in Malaysia, according to the list of Malaysia’s 50 Richest published by Forbes Asia in April.

This post has been edited by plouffle0789: Oct 12 2024, 10:26 PM

why Teh Family cannot each person hold 5 percent shares?


William Teh Lee Pang

Lillian Teh Li Ming

Lillyn Teh Li Hua

Diona Teh Li Shian

Total 20 percent......


Just sell 3.41 %....


The Teh family, through Consolidated Teh Holdings Sdn Bhd and the estate of Teh Hong Piow, holds a 23.41% stake in Public Bank,

making them the largest shareholder of the bank. Based on Public Bank's issued share capital of 19.4 billion shares,


CGS International Securities Malaysia estimates that the Teh family will need to sell 2.6 billion shares.


That accounts for the bulk of their net worth of $5.4 billion, making them the third richest family in Malaysia, according to the list of Malaysia’s 50 Richest published by Forbes Asia in April.

LPI Capital Berhad Acquisition by Public Bank

Public Bank Berhad (PBBANK) is set to acquire a 44.15% stake in LPI Capital from the family of the late Tan Sri Dato' Sri Dr. Teh Hong Piow, for RM1.72 billion (at RM9.80 per share). Once approved, this acquisition will lead to an unconditional general offer for the remaining shareholders.

This price is not attractive for small shareholders of LPI Capital, as the trading price prior to the announcement was RM13 per share, representing a discount of approximately 25%.

Both Public Bank and LPI Capital are controlled by the TEH family. Dr. TEH passed away at the end of 2022, leaving behind 21.64% of Public Bank and 42.74% of LPI Capital, which have been inherited by his descendants through Teh Holdings. This sale was a result of negotiations.

Naturally, it is unlikely that ordinary shareholders would agree to such a low price since LPI Capital is considered a quality stock with generous annual dividends.

The TEH family holds substantial shares, and finding a buyer may not be easy. Additionally, they are also shareholders of Public Bank, meaning that the acquisition benefits them indirectly.


The low price may be seen as a compromise to facilitate the sale. The specific reasons behind this move remain unclear.

During Dr. TEH 's lifetime, rumors circulated about potential acquisitions of Public Bank due to the unique circumstances of the Malaysian banking industry, with banks like Malayan Banking and CIMB reportedly showing interest. However, these rumors never materialized.


Now, two years after his death, the sale of LPI Capital raises questions about whether the family intends to exit the banking and insurance sectors.

In reality, the Teh family's significant shareholdings were largely due to their father's contributions. Acquiring such stakes in today's environment as an individual would be nearly impossible.


********************
Moreover, as wealth transitions to the third and fourth generations, without a guiding patriarch, disputes may arise. Therefore, exiting at the right time could be a wise decision.

Otherwise, they might have to manage the family wealth professionally, akin to the Rockefeller family.

Renewed M&A Activity in Banking Sector

As Malaysia's economy improves, the trend of mergers and acquisitions in the banking sector is expected to revive. A recent example is the Sarawak state government's acquisition of a significant stake in Affin Bank. Chinese-founded banks like Public Bank and Hong Leong Bank remain targets for acquisitions.

Owning a bank is not solely a reflection of wealth; it also depends on decisions made by the central bank and government policies. If unfavorable changes occur regarding personal ownership of significant bank shares or if economic turmoil arises, it would be challenging to sell such large holdings like those of the Teh family.

As an observer, it seems that the sale price is too low. In fact, if the Teh family were to sell shares in the open market, it could negatively impact the company's stock price even further. Thus, selling to a shareholder with shared interests is justifiable.

Disclaimer

This column is purely for academic or experiential advice. Readers interested in investing should conduct thorough research or consult with stockbrokers before making decisions, bearing all profits and losses themselves. We encourage creating wealth through proper investment methods. The author's views do not represent the position of the Nanyang Siang Pau.



Seems need to hold a EGM first

https://www.barrons.com/market-data/stocks/...?countrycode=my

Until now also price up

Really nice