We initiated a coverage on Bank Saudara (SDRA:IJ). The bank is one of the ten oldest saving and lending organizations in Indonesia, formed in 1906 by a band of batik and leather traders in Bandung, West Java. Yesterday, a subsidiary of Korea's second largest commercial bank Woori Bank, Bank Woori Indonesia (BWI) has announced its plan to buy a 33% stake in Bank Saudara (SDRA) for an undisclosed price, pending on BI approval. Looking at prior Indo banking M&A transactions, almost all end up in a tender offer. On status-quo, SDRA is reasonably valued on 11.0-8.0x FY12-13F PER and 2.2x FY12 PBV. Big synergy if SDRA is to be merged with BWI, with their combined net profit potentially becoming 50% larger just on funding efficiency, before operational cost savings (which we cannot see in BDMN-DBS Indonesia merger scenario). Furthermore, the Woori group plans to make SDRA to be the next BTPN, which is always possible given SDRA's small base to begin with (we cannot see BDMN benefiting greatly from the deal, other than the TO).
The price is not yet disclosed, but it will get announced eventually, either when BI gives its approval or when the shares are crossed in the market. Bisnis Indonesia newspaper is quoting Reuters who reported in January 2012 that SDRA management wants 3.5-5.0x PBV in the case of a strategic buy-in.
We speculate that BWI may pay between 3.0 to 3.5x FY12F PBV for SDRA, or between Rp705 and Rp822 per share. We also speculate that BWI may not stop at just 33% ownership, judging from the potential synergy between BWI and SDRA (a merger and a change in control should trigger a tender offer). We initiate coverage on SDRA with a BUY rating and a 12M target price of Rp750 per share (44% upside)
By : Listri Valsa
Powered by Telkomsel BlackBerry®
Tidak ada komentar:
Posting Komentar