Malayan Banking Bhd, Malaysia's biggest lender, may raise as much as RM3.63 billion (US$1.2 billion) through a private placement, according to a note sent to investors.

The Kuala Lumpur-based bank intends to sell 300 million shares, equivalent to 3.68 per cent of its enlarged share capital, at an indicative price of RM8.80 per share, Maybank said in a stock exchange filing today. It has an option to sell an additional 112 million shares, according to a term sheet for the transaction obtained by Bloomberg News.

"The proposed private placement will further strengthen the company's capital case and support its growth objectives," Maybank said in the filing. "Apart from continued strength in the Malaysian domestic economy, the company is also experiencing healthy growth from its various regional subsidiaries."

Maybank has been expanding overseas, acquiring Singapore brokerage Kim Eng Holdings Ltd last year. It also owns 95 per cent of PT Bank Internasional Indonesia and minority stakes in lenders in Pakistan and Vietnam. The group will consider buying a retail bank in Thailand, Chief Executive Officer Abdul Wahid Omar said last year.

The lender would be interested in one-on-one discussions with General Electric Co about its US$1.6 billion stake in Bangkok-based Bank of Ayudhya, one person familiar with the matter said today. Maybank hasn't signed a non-disclosure agreement, said the person, who couldn't be named because the sales process is private.

Discount

Maybank wants to earn 40 per cent of operating profit from outside Malaysia by 2015 and wants to have a presence in all the region's major markets by then, Wahid Omar said last year. Bank officials declined to comment on Bank of Ayudhya by phone today.

The indicative placement price is a 2.2 per cent discount to Maybank's closing price of RM8.99 today. The company's shares have risen 4.8 per cent this year, underperforming an 8.5 per cent gain in the benchmark FTSE Bursa Malaysia KLCI Index.

The fundraising exercise also "facilitates the meeting of more stringent capital requirements under the Basel III framework," Maybank said in the statement.

The bank will start taking orders today and decide on the number of shares to be issued and pricing at the end of the sales process, it said. Maybank Investment Bank Bhd and UBS AG are managing the offering. -- Bloomberg