Johannes Salim, CFA

Event-Driven

Bank Tabungan Pensiunan Nasional / Event-Driven

Bank Tabungan Pensiunan Nasional (BTPN IJ)

<ul>
<li>The merger of <a href="https://www.smartkarma.com/entities/483" target="_blank" data-smartkarma-citation="entities:483:1">Bank Tabungan Pensiunan Nasional (BTPN IJ)</a> and Sumitomo Mitsui Banking Corporation Indonesia (SMBCI) is likely to go through despite the rule on 40% foreign ownership cap, in our opinion.</li>
<li>Investors wanting to profit from the merger-arbitrage trade should do it through on-going cash offer since mandatory tender offer (MTO) is not likely to happen.</li>
<li>BTPN, not <a href="https://www.smartkarma.com/entities/135" target="_blank" data-smartkarma-citation="entities:135:1">Bank Danamon Indonesia Tbk (BDMN IJ)</a>, is a much better bet for the merger-arbitrage trade.</li>
<li>Merger-arbitrage trade through BTPN's cash offer would yield a good 13-14% p.a. return (assuming swap cost of 5-6%) given the foreign ownership cap confusion.</li>
</ul>


The merger of Bank Tabungan Pensiunan Nasional (BTPN IJ) and Sumitomo Mitsui Banking Corporation Indonesia (SMBCI) is likely to go through despite the rule on 40% foreign ownership cap, in our opinion.
Investors wanting to profit from the merger-arbitrage trade should do it through on-going cash offer since mandatory tender offer (MTO) is not likely to happen.
BTPN, not Bank Danamon Indonesia Tbk (BDMN IJ), is a much better bet for the merger-arbitrage trade.
Merger-arbitrage trade through BTPN's cash offer would yield a good 13-14% p.a. return (assuming swap cost of 5-6%) given the foreign ownership cap confusion.


Sumitomo Mitsui Financial Group (8316 JP)

Bank Tabungan Pensiunan Nasional: Deciphering the Merger and Arbitrage Trade