Indonesia’s Danamon shares rise to 17 year high post MUFG deal

The Danamon Bank logo is seen at its Tebet branch office in Jakarta, Indonesia, December 27, 2017. REUTERS/Beawiharta

Shares in PT Bank Danamon Indonesia soared to their highest level in more than 17 years after Japan’s Mitsubishi UFJ Financial Group (MUFG) said it planned to buy a majority stake in the country’s fifth-largest lender.

MUFG said it had agreed with Danamon shareholders to buy 73.8 percent of the bank and would like to raise that to 100 percent as it looks to strengthen its presence in Southeast Asia’s biggest economy.

Danamon‘s shares rose as much as 16.7 percent in early trade on Wednesday to 7,000 rupiah per share.

The first stage of the acquisition – a purchase of a 19.9 percent stake from Singapore state investor Temasek – was agreed at 8,323 rupiah per share or 15.88 trillion rupiah ($1.2 billion).