Indonesia’s Panin Bank sale has stalled on valuation, sources say

A SALE of Bank Pan Indonesia by its majority shareholders has stalled as bidders were concerned over valuations and the substantial capital needs for a transaction, according to people familiar with the matter.

Prospective suitors had been in discussions for a controlling stake in the Jakarta-based lender known as Panin Bank but the deal talks have hit a snag recently, the people said, asking not to be identified as the information is private. The parties haven’t been able to bridge the differences over valuation and some bidders were worried about deploying capital for a major acquisition amid market volatility, the people said.

Shares of Panin Bank have risen almost 42 per cent in the past year, giving the lender a market valuation of about US$2.1 billion.

Panin Bank’s biggest shareholders, including the Gunawan family with a 46 per cent stake and ANZ Group Holdings with about 38.8 per cent have been working with their respective financial advisers as they explore a potential sale of their holdings, Bloomberg News has reported. Japanese lenders Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group are among those that have showed interest in the asset earlier, people familiar with the matter have said.

The stalemate comes amid Silicon Valley Bank’s collapse in the US and an emergency takeover of Credit Suisse Group by its larger rival UBS Group in March. It also represents yet another twist in the long-running series of attempts by some of Panin Bank’s shareholders to sell their stakes. The Gunawan family’s reluctance to give a board seat to an incoming investor had stymied ANZ’s earlier negotiations with suitors, Bloomberg News reported in 2015.

Representatives for ANZ, Panin Bank, SMFG and MUFG declined to comment, while the Gunawan family could not immediately be reached for comment. BLOOMBERG