THE EFFECT OF ACQUISITION OF PEGADAIAN AND PNM BY PT. BANK RAKYAT INDONESIA TBK TO BBRI VALUATION

• Main Author: Wahyudin
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/67865
• Institution: Institut Teknologi Bandung

2020 will be a tough year for every country. The Covid-19 pandemic has had a major impact on the decline in the national economy in almost all business sectors. This also has an impact on the MSME sector. In June 2021, open information regarding the corporate action plan carried out by PT. Bank Rakyat Indonesia Tbk to conduct a rights issue. The plan to increase the capital of PT Bank Rakyat Indonesia Tbk through the rights issue scheme is in the context of forming a BUMN Ultra Micro holding by acquiring 2 funding companies in Indonesia, namely Pegadaian and PNM. The purpose of this corporate action is in line with one of the company's missions, which is to carry out banking activities as well as possible by prioritizing services to the micro, small and medium segments to support the improvement of the community's economy. This will strengthen the Company's business growth by expanding the target segment and adding product variants so that it can generate sustainable income for the Company and make a positive contribution to stakeholders. This study aims to analyze the fair value of shares of PT. Bank Rakyat Indonesia Tbk. before and after M&A using the dividend and discount model (DDM) and relative valuation. The dividend discount model method focuses on the future dividend potential of a business and assumes that the value of the firm depends on its ability to generate consistent income over time. For the relative valuation method using the price-to- earnings (P/E) ratio and price-to-book value (PBV) ratio for the financial sector, especially banking, to determine the value of PT. Bank Rakyat Indonesia Tbk. Based on the calculations made by the author using these two methods, the intrinsic value of bank BRI when it does not conduct M&A is 4,994 per share with an upside potential of 21.50%. Meanwhile, the total intrinsic value of Bank BRI after conducting M&A is 5,110 per share with an upside potential of 24.34%. Because the results of the calculation of the intrinsic value of BBRI are undervalued, the authors recommend BUY for shares of PT. Bank Rakyat Indonesia (Persero) Tbk with the stock code BBRI. For existing investors, to hold BBRI shares in order to get a higher potential capital gain until it reaches or approaches the intrinsic value because there is a fairly high upside. For the potential investors are advised to buy BBRI shares because they are considered undervalued from the current market price and have the potential for profits of up to 20%.