Malayan Banking Bhd (Maybank) and CIMB Group Holdings Bhd have ceased their separate negotiations with RHB Capital Bhd on a possible merger.

Analysts said the asking price could have been too high which could have led the country's top two banks to pull out of the race together.

Maybank, in a filing to Bursa Malaysia, said the decision was taken in the light of recent developments and following further deliberations.

CIMB Group Chief Executive Datuk Seri Nazir Razak, in a separate statement, said the bank believed that it would not be able arrive at a value creating merger based on its various discussions and assessment of the present expectations of key stakeholders.

'Merger negotiations are both resource consuming and distracting for staff and stakeholders. Therefore, we prefer no to prolong our discussions unnecessarily, allowing all parties to return to business as usual as soon as possible,' he said.

Neither mentioned anything about the price.

Meanwhile, RHB Capital is not seeking alternative merger partners at this time, Director Azlan Zainol said in a telephone interview.

Analysts contacted by Bernama said the twist started when Abu Dhabi Commercial Bank started to sell its 25 per cent stake to Abu Dhabi-based investment fund Aabar Investments at a relatively high price.

The fund paid RM10.80 per share for the stake when the fair value was said to be around RM10.50 per share, and this was said to have complicated the proposed takeover of RHB.

Market watchers are awaiting what Bank Negara would say about this as the deal was called off less than a month after approvals were given for the merger talks.

RHB Capital's merger with either bank could have created what might have been the biggest bank in Southeast Asia, overtaking Singapore's DBS Group.

At the close of trading on Bursa Malaysia, Maybank was down two sen to RM8.82 while CIMB dropped four sen to RM8.51. RHB, in turn, lost 57 sen to RM9.03. -- Bernama, Bloomberg