Shares in BankThai surged over 40 percent on Monday after Malaysia's CIMB agreed to buy a large stake in the small Thai lender for 5.9 billion baht ($177 million) to widen its Southeast Asian banking presence.
The Thai central bank's bailout arm, which currently owns the 42 percent stake, said on Friday that Malaysia's second-largest lender had agreed to pay 2.10 baht per share.
The price was 2.91 times BankThai's book value of 0.73 baht per share at end-March, and a 59 percent premium to BankThai's last traded price last week.
BankThai shares surged 39.39 percent by late morning on Monday to 1.84 baht, their highest since November 2007, after resuming trade following a two-day suspension. The stock hit a high of 1.93 baht in early trade.
Shares in Malaysia's Bumiputra-Commerce, which owns CIMB Bank, were down 1.2 percent on the Malaysian stock exchange.
CIMB also plans to buy BankThai shares from other shareholders at the acquisition price.
CIMB said the mandatory general offer and a 500-600 million ringgit ($153.8-$184.6 million) recapitalisation exercise would raise the cost of the Thai deal to about $584 million, assuming the offer is fully accepted.
Post-recapitalisation and other adjustments, the price will drop to 2.3 times BankThai's book value.
"Market punters are pushing up share prices to the acquisition price and they are looking forward to sell on the tender offer," said KTB Securities senior analyst Supakorn Sujirattanawimol.
She expected Finance Minister Surapong Suebwonglee to approve the deal despite his comments on Friday that his ministry needed more time to review the transaction.
The deal boded well for the future of ailing BankThai, which needs to raise about 6.0 billion baht to strengthen its capital base and for its expansion plans, Asia Plus Securities said.
"BankThai's troubles should come to an end and we advise investors to hold
the stock," it said.