Volkswagen Bank acquires Lunping, independent consultants believe it is fair and reasonable.

According to the announcement, the independent advisor, Malaysia Investment Bank, after evaluation, recommends DBS Bank shareholders to approve the above-mentioned acquisition at the extraordinary general meeting, indicating that the acquisition is fair and reasonable, and does not harm the interests of small shareholders.

According to Malaysia Investment Bank, DBS Bank's offer of 9.80 ringgit per share for Lunping is lower than Lunping's stock price level in the past 3 years. At the same time, the price-to-earnings ratio and price-to-book value ratio of the above bid are also similar to those of other comparable ordinary insurance companies.

We note that this acquisition provides an opportunity for Volkswagen Bank to expand its range of financial products and market footprint into the ordinary insurance field, especially domestically. Regardless of Volkswagen Bank or Lunping, the distribution capabilities and competitive advantages can be strengthened after the acquisition is completed.

Volkswagen Bank held a rare press conference on October 10th, announcing an offer of 1.72 billion Malaysian ringgit or 9.80 ringgit per share to acquire 44.15% of Lunping's shares from the joint major shareholder, the Cheng family. This triggers a mandatory general takeover mechanism, offering the remaining Lunping shares to other shareholders at the same price of 9.80 ringgit per share.

Regardless, Volkswagen Bank intends to maintain Lunping's listed status.

Volkswagen Bank will hold a mega online shareholder meeting on November 28th to seek approval from shareholders for the above acquisition plan.