The government's Employees Provident Fund (EPF) today joined in the fray for debt-ridden Rashid Hussein Berhad bank, launching a counter offer to bids from EON Capital and a Middle East consortium.

EPF will offer RM2.2 billion for a 32.8 percent stake in RHB currently held by its single-largest shareholder, Utama Banking Group (UBG), UBG said in a statement to the Malaysian stock exchange.

UBG announced last month it would sell its entire RHB stake to the Middle East consortium for RM2.16 billion in an exclusive deal.

EON Capital, the holding company of EON Bank, later announced it was making a counter offer for RHB. The EPF is a major shareholder in both EON Capital and UBG.

"Subject to the completion of the proposed offer, EPF will undertake to extend a mandatory general offer for all the securities it does not already own in RHB," UBG said in the statement.

Islamic banking group Kuwait Finance House - through its Malaysian subsidiary KFHMB - is leading the Middle Eastern consortium which includes the Gulf Cooperation Council of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

The group has said it is prepared to pump in RM12 billion to create the world's largest Islamic bank after purchasing UBG's stake.

RHB is Malaysia's fourth largest lender.