Gupta's Expensive Buy

We should be used to this kind of incestuous deals by now. DBS pays $9.1 billion to buy 67% of Bank Danamon Indonesia, the stake which is held by Temasek Holdings. What is the message here? That Danamon will perform better under ownership of DBS, or Temasek is tired of Danamon's record of returns since its acquisition in 2003?

Critics are already saying India import Piyush Gupta overpaid - a premium of 56.3 percent over last month's average share price. Another big spender, foreign talent Philippe Paillart, blew $10 billion for Dao Heng Bank in 2001, an investment DBS had to write down twice. Bank Danamon's shares surged 50 percent at the news, meaning Gupta will be blowing more money to acquire the outstanding shares. From whence did DBS and Temasek get its original seed money in the first place - you know the answer to this one.

The real interesting bit is to come - we are talking about the country that refused to sell us sand, and still pissed off with the extradition impasse of crooked businessmen parking their ill gotten funds here. Reuters are already reporting that some Indonesian bankers would try to block the deal and were considering a media campaign targeting public opinion in the hope of influencing politicians.

"You're going to see some movements to halt this deal in the coming days," said a senior executive of a rival local bank, who asked not to be named because of what he called the sensitivity of the issue. "This is about nationalism. We don't have to be afraid of Singapore ... We're going to raise this case to parliament, the central bank and (banking regulator) Bapepam," he added.

Bankers and industry analysts generally agree there is little scope for a rejection of the deal on strict regulatory grounds, but a politically focused campaign could prove unpredictable. Looks like there are going to be more excuses to delay the Hougang by-election.