DBS: Investors don’t like the Indon deal

In Banks, Corporate governance, Indonesia, Temasek on 03/04/2012 at 11:34 am

Well DBS is down 0.44 to 13.74 some 3% from Friday’s close.

Despite all the propoganda from our constructive, nation-building mainstream media, aided and abetted by the wires and most brokers, investors don’t like the Bank Danamon deal. To be fair, investors nowadays don’t like their investee companies doing mega strategic deals (like Pru’s attempted purchase of AIA last year) because the historical numbers (still disputed) seem to show that strategic deals destroy shareholder value.

Well theĀ non-Temasek shareholders of DBS will have an opportunity to reject the deal, if they think that Temasek benefits far more than DBS? BTW, did you know that when DBS bot PosBank from Temasek all that many years ago, it was a great deal for Temasek, not so gd for DBS .

  1. When the ANGMOH commented that they over paid for Dao Heng in Hong Kong. He disappeared from scene. Hope this does not apply to the Indonesian Bank.

  2. You use your undervalued shares to pay for an overvalued acquisition (in terms of P/B), how to make sense of it? Your EPS get depressed for a few years, potentially messy integration, share overhang concern now that Temasek owns some 40%? enlarged capital.

    Bad for DBS shareholders like me. Only saving grace is that Chairman and CEO have been excellent since they took over… and CFO said they can maintain dividend payout.

    • Err don’t think DBS share is undervalued. There was a mkt discount because investors tot shumething like this would happen. They remember Dao Heng and SingTel’s purchase of Optus: Temasek’s “imperial” vision.

      Sad that Chairman and CEO did not get enough time to tidy up DBS. Seah has the practical vision, Gupta has the operation experience. Great time. As to maintained divident payout, shows that existing shareholders could have been paid a lot more. )))))

      Go buy UOB or OCBC. )))))Controlling shareholders there have their money where their balls are, unlike at DBS. Hurray for family-run firms. ))))

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