[Banks] Is the acquisition case of more benefits than harms worth investing in?

Last week, banks became the focus of Malaysian investors; Banks will spend 1.72 billion ringgit to acquire our country's highest market share in fire insurance, LPI, at a price of 9 ringgit 80 cents per share, much cheaper than the current trading price of LPI.

However, after suspending trading for two days, banks resumed trading and triggered market selling, mainly due to concerns over another announcement by banks that day - the shareholding reduction by the Chung family resulting in a drop in stock price.

Objectively speaking, banks will not issue new shares to acquire LPI this time, which means banks' earnings per share will increase by 1 cent to 2 cents after acquiring 44.15% equity, increasing the per share value of banks.

Many media outlets have also reported that this acquisition will not cause any changes in management, and Public Bank has been rooted in Malaysia for many years, being a rare good bank, even expected to have one of the highest Interest Rate Spreads in Malaysia, thus always being highly favored by institutions and value investors.

Over the years, Public Bank's financial performance has also confirmed their steady rise, not to mention their risk resistance capabilities, so the stock price drop caused by panic selling is actually an investment opportunity.