BIMB Holdings Bhd has cleared the final hurdle to acquire the entire stake in Bank Islam.
It received full support from its shareholders for the proposed acquisition at an extraordinary general meeting yesterday.
The bank will now be able to acquire the remaining 30.47 per cent stake in Dubai Financial Group and 18.53 per cent stake in Lembaga Tabung Haji, an exercise that may be worth RM3 billion or more.
"This is the final hurdle,as we have procured all the regulatory approvals," said BIMB group managing director Johan Abdullah.
BIMB is also looking at a rights and sukuk issue to fund the acquisition.
The group has proposed a renounceable rights issue of 426.71 million new shares with 426.71 million free warrants at RM3.60 per rights share to raise RM1.54 billion and is also looking at issuing a 10-year Islamic security of up to RM2.1 billion in nominal value to raise an indicative RM1.47 billion.
The rights issue is on the basis of two rights shares and two warrants for every five existing BIMB shares held by shareholders.
"At the moment, we own 51 per cent of Bank Islam. The bank is the main contributor to our business at 81 per cent, even though we own smaller firms like Syarikat Takaful Malaysia and other stockbroking businesses.
"I believe that after the acquisition, Bank Islam's contributions will increase up to 95 per cent in terms of revenue and profit and this will be reflected in the next financial year," said Johan.
"Based on the current strategic Bank Islam plan, we are targeting the financing business to grow 75 per cent by 2015. We are also looking at growing organically," said Johan.
He also noted that BIMB is no longer pursuing the Bank Muamalat acquisition as speculated earlier.