In what would be the first bank merger in over five years in Malaysia, the acquisition will see MBSB emerge as the second-largest standalone Islamic bank after Bank Islam Malaysia Bhd, which has assets of RM89.85 billion.

As of noon, over 40.5 million shares were traded, versus 3.58 million last Friday (June 9) and the group’s 200-day average trading volume of 5.46 million, making it the fifth-most actively traded stock so far today.

MBSB’s share price rose as high as six sen or 9.52% to 69 sen, compared to 63 sen at the close of trade last Friday.

In a Bursa Malaysia filing on June 9, the group said the purchase consideration would be satisfied via the issuance of 1.05 billion MBSB shares – 12.8% of the group’s enlarged share base – to PNB at 96.52 sen per share.

The RM1.01 billion represents 0.85 times the price-to-book (P/B) ratio of MIDF’s adjusted net assets as at end-December 2022, while the issue price reflects a P/B ratio of 0.83 times MBSB’s adjusted net assets.

After the proposed acquisition is completed, PNB will hold a 12.8% share in MBSB, whilst MIDF becomes a wholly-owned subsidiary of the bank.

EPF, which is a majority shareholder of MBSB with a 65.9% stake as at May 15, would see its equity diluted slightly to 57.45%.

“(The acquisition would) bring together two banking groups with a combined capital base of approximately RM10.69 billion and assets of approximately RM61.73 billion as at the financial year ended Dec 31, 2022,” said MBSB.

The deal is expected to be completed in the third quarter of 2023, subject to the approval of MBSB shareholders, the Securities Commission and Bursa Securities.