By Kane Wu and Yantoultra Ngui
HONG KONG/SINGAPORE (Reuters) - Australian lender ANZ and Indonesia's Gunawan family are considering selling a combined controlling interest in Jakarta-listed Bank Pan Indonesia Tbk PT (Panin Bank), in which they each hold substantial stakes, three sources with knowledge of the matter said.
The Gunawan family, which founded the bank in 1971, would be open to paring down their own 46.52% stake and selling control of the bank, the three sources said. The founding family's decision aligns with the Australian lender, which had attempted to exit the bank for years to no avail due to valuation concerns.
A buyer who wishes to acquire control would need to make a general offer for Panin Bank, which has a market value of about $2.4 billion. Shares of Panin Bank have climbed some 29% year-to-date, LSEG data showed.
The shareholders have appointed Citigroup to run a sale process, said the sources, who declined to be named as the information was confidential.
Marketing materials have been sent to prospective buyers, said two of them. A formal sales process is still weeks away, said the third source.
The Gunawan family is flexible in how much stake it can sell, depending on the offer price, said two of the sources.
ANZ owns a 39.22% stake in the bank, according to LSEG data. Their combined stakes are worth some $2 billion based on Wednesday's closing price of 1,540 rupiah per share, LSEG data showed.
ANZ and Citigroup declined to comment.
The Gunawan family could not be reached for comment. Panin Bank referred Reuters' query to its shareholders.
ANZ has been attempting to exit its stake in Panin Bank since 2013, but valuation concerns had hampered its efforts. It first bought a 29% stake in the Jakarta-listed lender in 1999, which was subsequently raised.
The auction of ANZ's stake last year attracted Japanese lenders Mitsubishi UFJ (NYSE:MUFG) Financial Group and Sumitomo Mitsui (NYSE:SMFG) Financial Group, but no deal was reached, sources have said.
The sale comes as part of ANZ's strategy to shrink low-returning business lines and reduce exposure to retail and wealth banking in Asia to boost return on equity.
In May, ANZ fully exited its investment in Malaysian lender AMMB Holdings by selling its entire 5.2% stake for up to $149 million, two months after it sold a 16.5% interest for about 2.10 billion ringgit ($498.46 million).
Mu'min Ali Gunawan, 85, founded the bank and is the ultimate beneficiary of the family's shareholding, according to disclosures from the bank.
His children Chandra Gunawan and Lionto Gunawan hold positions in Panin Bank as commissioner and director, respectively.
Panin Bank's net profit dropped 8.16% on-year to 3.01 trillion rupiah ($195.65 million) last year due to decline in net interest income, its 2023 annual report showed.
By mid-year 2024, Panin Bank was trading at 0.73 times its book value, LSEG data showed.
($1 = 4.2130 ringgit)
($1 = 15,385.0000 rupiah)