Gulf Energy Development (Gulf) has emerged as the fifth-largest shareholder in Kasikornbank (KBank), Thailand’s third-largest lender by asset value, sparking speculation that the energy giant may aim to replicate its takeover of Intouch Holdings (INTUCH).
As per the Stock Exchange of Thailand (SET), Gulf now holds 77 million shares in KBank, representing a 3.25% stake and making it the bank’s fifth-largest shareholder. The largest shareholders include Thai NVDR Ltd (15.42%), State Street Europe Ltd (7.51%), South East Asia UK (Type C) Nominee Ltd (4.83%), and the Social Security Office (3.40%).
With KBank’s share price at 157.50 baht as of March 19, Gulf is expected to have invested around 12.12 billion baht for this acquisition. This move positions Gulf to potentially receive dividends of approximately 808.50 million baht from KBank.
KBank executives commented that Gulf’s increased shareholding reflects a “normal portfolio investment,” without providing specific details about the timeline for this acquisition. Following the announcement, KBank’s shares rose 2.22% to reach 161 baht, while Gulf’s shares increased by 1.96% to 52 baht.
Bualuang Securities (BLS) noted that Gulf’s investment in KBank has prompted speculation about a potential repeat of its takeover of INTUCH. While Gulf has publicly stated that its investment is aimed at trading and dividend income, any further acquisition of shares may indicate deeper strategic intentions, according to the brokerage.
“Gulf stands to benefit financially from its KBank investment, leveraging lower funding costs and an enhanced equity base following its INTUCH merger,” said BLS analyst Kijapat Wongmetta. With a 3.25% stake, analysts anticipate a modest 1.2% increase in Gulf’s earnings for 2025. However, if Gulf were to acquire a 30% stake, potential earnings growth could rise to 43%.
NORMAL INVESTMENT
Sarath Ratanavadi, CEO of Gulf, characterized the share purchase in KBank as a regular investment involving “buying and selling” stocks. This statement came in response to inquiries from the Bangkok Post about the company’s motivations. When asked if Gulf’s share acquisition was for price speculation rather than long-term ownership in KBank, Mr. Sarath declined to comment.
Yupapin Wangviwat, Gulf’s Chief Financial Officer, indicated that Gulf’s investment mirrors any investor’s approach when buying shares in a strong-performing bank. She noted KBank’s high liquidity, low price-earnings (P/E) ratio, and attractive dividends as appealing factors. Gulf will evaluate its options based on price movements, intending to benefit from this investment, which has already yielded 808.5 million baht.
POSSIBLE SYNERGIES
Suwat Wattanapornprom, head of research at Krungsri Securities, suggested that Gulf’s increased stake in KBank aligns with its strategy to expand into virtual banking. “To operate a virtual bank, adequate data and artificial intelligence capabilities are essential, which a partnership with KBank could provide for Gulf,” he said.
Recently, Gulf, a leading power producer, collaborated with telecom giant Advanced Info Service and Krungthai Bank to apply for a virtual bank license from the Bank of Thailand. Five groups submitted applications, with successful candidates expected to be announced by mid-year.
Mr. Suwat noted that Gulf’s executives affirmed the investment is for liquidity management and that KBank’s share price justifies the investment. He added that potential synergies might emerge in Gulf’s future endeavors, suggesting that this partnership could lead to collaborative opportunities.
Given Gulf’s funding strategies prior to the INTUCH acquisition, which included a 32-billion-baht equity issuance and a 100-billion-baht debt expansion, similar approaches might be considered now. After acquiring INTUCH, Gulf’s debt is expected to rise significantly to 800 billion baht, providing considerable leverage for future acquisitions.
Considering the regulatory challenges surrounding majority ownership of KBank and Gulf’s substantial remaining debt capacity, analysts predict that KBank may not be Gulf’s final target. Instead, the company may pursue assets with low P/E ratios and recurring income, particularly within renewable energy and infrastructure sectors, according to BLS.
On Monday, KBank informed the SET that it would propose a special dividend for shareholders at an extraordinary general meeting on May 7, with a proposed payout of 2.50 baht per share. While Gulf previously dismissed rumors about acquiring KBank, Mr. Suwat mentioned that analysts are closely monitoring Gulf’s activities to determine if this purchase marks the start of a broader expansion strategy.
