The Public Bank building in Kuala Lumpur.
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, 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. A decade later, Teh joined Malayan Banking where he rose through the ranks to become general manager at age 34.
