ANZ Said to Revive Talks to Sell $948 Million Panin Stake

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ANZ CEO Michael Smith
ANZ prefers expanding its own businesses over acquisitions, which call for a premium over the net value of the assets, said Michael Smith, Chief Executive Officer of Australia & New Zealand Banking Group Ltd. Photographer: Brendon Thorne/Bloomberg

Australia & New Zealand Banking Group Ltd. resumed talks to sell its 39 percent stake in PT Bank Pan Indonesia after discussions stalled for more than a year, people with knowledge of the matter said.

The sale may draw interest from Japan’s Mizuho Financial Group Inc., which was previously in talks to buy the stake, as well as other bidders, according to one of the people. The Gunawan family that controls Jakarta-based Bank Panin, as the lender is known, may now be more receptive to another investor buying the holding, the people said, asking not to be identified as the information is private.

Bank Panin shares rose, taking gains for the past year to 56 percent and valuing ANZ’s holding at about $948 million, data compiled by Bloomberg show. The Melbourne-based lender is seeking to sell the stake after Australian regulators introduced rules in 2013 requiring banks to subtract the entire value of overseas minority investments from Tier 1 capital.

“Resumption of talks and the likelihood of the stake sale is positive for ANZ,” David Ellis, a Sydney-based analyst at Morningstar Inc. said Thursday. “Minority investments are a drain on capital calculations and returns. ANZ has indicated it would either like to own a majority or exit the stakes.”

ANZ began discussions with Mizuho to sell the stake in 2013, according to people with knowledge of the talks. The negotiations stalled as the Gunawan family resisted Mizuho’s demand for a board seat, people familiar with the matter said last year.

Capital Boost

ANZ owned a combined A$4.4 billion ($3.4 billion) of stock in four Asian lenders at the end of September, according to its latest annual report. It valued the Bank Panin stake at A$795 million at that time. A $1 billion addition to capital would increase ANZ’s common equity Tier 1 ratio by about 35 basis points, according to Ellis. The measure stood at 8.4 percent at the end of December, according to filings.

Bank Panin shares climbed as much as 3.9 percent and traded 2.4 percent higher at 1,305 rupiah at 9:37 a.m. in Jakarta. Shares of ANZ fell 0.5 percent to A$35.30 in Sydney.

Fadjar Gunawan, president director of the Gunawan family’s PT Panin Dai-Ichi Life and son of patriarch Mu’min Gunawan, and Bank Panin Corporate Secretary Jasman Ginting didn’t answer calls to their mobile phones seeking comment.

Hendrawan Danusaputra, a director at Bank Panin, declined to comment, as did representatives for ANZ and Mizuho.

ANZ prefers expanding its own businesses over acquisitions, which call for a premium over the net value of the assets, Chief Executive Officer Mike Smith said last week in Sydney. The bank is seeking to double the profit contribution of its businesses outside of Australia and New Zealand to as much as 30 percent by 2017.

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