JAKARTA: Shares in Indonesia's sixth largest lender PT Bank Danamon rose as much as 5.9 percent after market rumours that Southeast Asia's biggest lender DBS Group has signed a deal to buy a majority stake in the bank from Singapore state investor Temasek worth about $4 billion.
Temasek holds a 68 percent stake in Danamon and also owns 28 percent in DBS.Industry sources familiar with the companies told Reuters that no deal had been done, while DBS said in a statement that "any scenarios linking DBS to specific names are purely hypothetical and speculative".
CLSA said in a note on Friday that "it appears that this rumor has legs and that an acquisition is imminent".
Rumours swirling among brokerage houses in Jakarta were that DBS will acquire a Temasek stake at 6,500 rupiah a share and a tender offer will be made for the remaining shares of Danamon.
Danamon was trading at 6,200 rupiah by 0427 GMT, after a high of 6,250 rupiah.
Shares in Danamon, which has a market value of $5.4 billion, are up 8.8 percent so far this year, easily beating the broader market's 7 percent drop.
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