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BTMU 'cautiously optimistic' on major stake buy in Indonesian lender

Bank Danamon shares soar to 17-year high on acquisition plan by Japanese bank

Bank Danamon is Indonesia's fifth-largest bank by market value.   © Reuters

JAKARTA -- Bank of Tokyo-Mitsubishi UFJ on Wednesday said Indonesian rules that generally forbid an entity from owning controlling stakes in more than one bank "will become an issue" in its plan to acquire a majority holding in Bank Danamon, hinting at a possible integration of its operations in the country.

BTMU on Tuesday said it was seeking to buy at least 73.8% of shares in Danamon, the country's fifth largest lender by market capitalization. It will initially acquire a 19.9% stake in Danamon from affiliates of Singaporean state wealth fund Temasek Holdings, and raise its stake to 40% by the third quarter of 2018. Upon regulatory approval, BTMU will lift ownership to over 73.8% with a tentative target of completion in 2019.

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