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DBS to Acquire Majority Stake in Vickers Ballas

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Merger Of DBS Securities And Vickers Ballas
Creates Asian Securities Powerhouse

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Retail/Institutional Customer Benefits,
Strategic Fit, Combined Management
Cited as Strengths

Greg Seow- Chairman of the Board (Centre), Raymond Lim- Group CEO (Left), Edmund Lee- CEO, Stockbroking (Right)SINGAPORE, FEB. 13, 2001 - DBS Group Holdings Ltd (DBS) and Vickers Ballas Holdings Ltd (Vickers Ballas) said today they will merge their securities brokerage businesses to create a single Asian securities powerhouse.

The new firm, DBS Vickers Securities, will have over 1,700 staff and a customer base of over 180,000.

On a proforma basis for 2000, based on unaudited financial statements for the year, the combined firm will have total assets of S$1.549 billion, with revenues of S$296.3 million and net income of S$65.0 million.

With the completion of the transaction, the combined firm will be the largest securities brokerage in Singapore and one of the largest in the region, with operations in Singapore, Hong Kong, Thailand, the Philippines and Indonesia.

Under the terms of the agreement, DBS Bank will pay minority shareholders S$443.9 million for a 59.5% stake in Vickers Ballas, 1.19 times Vickers Ballas' book value as at December 31, 2000, adjusted for the distribution of Vickers Capital.

In announcing the merger, Philippe Paillart, Vice Chairman & CEO of DBS said, "What this merger is really about is enhanced securities advice and transaction capabilities for customers. It also creates a truly regional securities business, with the application of information technology across the region which few others can match."

"This transaction creates something more than a leading brokerage house. The strategic combination of Vickers Ballas' market presence, sales force and management expertise with DBS' large customer base, extensive branch network, leading IT platform and wide product offerings opens significant new opportunities for us in Singapore as well as regionally.

"We see this as just one of several strategic moves for our securities operations. Together with the bank, we aim to build an integrated wealth management operation providing traditional brokerage services along with a range of financial planning products, such as unit trusts, insurance products and others. We will leverage multiple channels, including traditional remisier and dealer contacts, the Internet and wireless distribution," said Paillart.

As part of the transaction, DBS and Vickers Ballas will also combine their corporate finance and securities research activities, according to Jackson Tai, President and Chief Operating Officer of DBS, who also oversees DBS' investment banking business.

"While the emphasis will be on individual customers, DBS Vickers Securities and DBS together now have an even stronger opportunity among institutional customers in the region," said Tai.

"Together, we will have the strongest corporate finance and research capabilities in Singapore . Our 95 professionals are the market leaders in IPO issuance, debt capital markets, mergers and acquisitions, loan syndications and specialized financial solutions. We expect to be able to better serve not only the financial needs of our large and small individual customers, but multinational issuers and institutions as well."

"By creating the dominant securities brokerage firm in Singapore, one with strong regional reach, we are able to connect DBS Vickers Securities' unparalleled retail distribution capability to our origination and securitisation abilities. No one else in Singapore, and very few in Asia, will have our ability to link origination, outstanding research and distribution," Tai said.

The transaction will involve three steps that include a capital reduction and a scheme of arrangement.

Prior to the acquisition, Vickers Ballas will distribute the 80.23% of the shares in Vickers Capital that it currently owns among its current shareholders. Each Vickers Ballas shareholder will receive approximately 679 Vickers Capital shares for every 1,000 Vickers Ballas shares they hold. The distribution of Vickers Capital is worth approximately S$0.54 per Vickers Ballas share, based on the Feb. 9, 2001 closing price.

Secondly, under the Scheme, Vickers Ballas shareholders will receive a cash distribution of S$0.90 per share.

The combined share and cash distributions have a value of S$1.44 per Vickers Ballas share, or a 40.1% premium to Vickers Ballas' Feb. 9, 2001 closing price.

Finally, Vickers Ballas shares, currently traded on the Singapore Exchange, will be de-listed and taken private. DBS Vickers Securities will then acquire 100% of DBS Securities from DBS Bank.

As part of the transaction, Singapore Technologies will retain its 40.5% stake in the new firm. Tay Siew Choon, Managing Director and Chief Operating Officer of Singapore Technologies, expressed strong support for the transaction.

"We have noted the consolidation currently underway in the domestic brokerage industry, and have been searching for a way to lead this process. We think this is a strong partnership, combining a premier brokerage name in Vickers Ballas with a dominant banking presence in DBS. We will work closely with DBS to foster the new firm's further development and growth."

DBS and Vickers Ballas officials said that key minority shareholders have also committed to the transaction. Y.S. Fu Holdings Pte Ltd and Reef Holdings Pte Ltd, companies which are owned or controlled by Peter Fu and Ong Beng Seng respectively, Citicorp Securities Asia Pacific Ltd and other shareholders, who collectively own approximately 35% of the outstanding shares, have signed irrevocable letters of undertakings to vote for and support the transaction.

Commenting on its shareholders' support for the transaction, Stephen Lee, Chairman of Vickers Ballas said, "This merger with DBS offers a very strong strategic alliance. We are glad that key minority shareholders have given their support to the merger."

The merger is subject to normal legal and regulatory approvals, from shareholders as well as Monetary Authority of Singapore (MAS) and the Singapore Stock Exchange (SGX). DBS Bank and Vickers Ballas expect to begin the legal and approval process immediately.

Download Media Fact Sheets, Transaction Structure, (PowerPoint Document Format), as well as a large (972x1374 JPG) image of the Management Team

For more information, contact:

Julie Yeo
DBS Singapore
E-Mail: julie_yeo@dbs.com
Tel: +65 6321-5447 (O)
Mobile: +65 9673-4433
Fax: +65 6227-4650



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