Investment giant CIMB today made a RM6.1 billion (US$1.64 billion) bid for Southern Bank after the bank's directors ended three months of merger talks last week.

CIMB said in a statement it would offer through its parent Bumiputra Commerce Holdings Berhad to "acquire the entire business and undertaking of Southern Bank ... including all the assets and liabilities."

CIMB offered Southern Bank directors 4.08 ringgit per share in cash and Southern Bank shareholders 3.08 ringgit in cash and one Bumiputra Commerce security issued at one ringgit for each of their shares.

With the security valued at 1.07 ringgit, the effective offer price for the Southern Bank shares totals 4.15 ringgit, CIMB said.

Country's second largest

The offer will be successful if shareholders holding more than 50 percent of Southern Bank shares approve the deal.

CIMB said the Southern Bank buy will complement its existing business, which focuses on treasury, corporate and investment banking, as the bank has significant retail and small-medium enterprises as customers.

It will also strengthen its position as the country's second largest financial services group in terms of asset size and number of branches.

The takeover is expected to be completed by the third quarter of this year, CIMB added.

Bumiputra Commerce and Southern Bank shares were suspended from trading as the announcement was made.