The central bank's Financial Institutions Development Fund accepted an improved offer from United Kingdom-based Standard Chartered to pay 12.4 billion baht ($319.1 million) for 75 per cent of Nakornthon Bank, said Salinee Wongtal, a senior central-bank official acting as Nakornthon's president.

"It's a very good price and it's the bank we always wanted," said Paul Dowling, Standard Chartered's regional head of external affairs. The government and Standard Chartered will close the deal on Friday when five Standard Chartered appointees will join an expanded nine-member board, and the development fund, holding 25 per cent, will appoint four members, Salinee said. At that time, Standard Chartered will unveil its plans for the bank, Thailand's second-oldest and one of thesmallest, with 67 branches, Dowling said.

By then, the central bank is also expected to reveal the winner of its auction of Radanasin Bank. Singapore's United Overseas Bank Ltd. last week declined to confirm reports it had won the auction, in which Citibank was also reportedly a bidder.

News of the Nakornthon deal came too late to affect the stock market Friday, but it helped to steady the baht, which closed at 38.71 against the US dollar, up from Thursday's close of 38.89. Protracted Debate

The deal with Standard Chartered came after protracted debate about the privatization of banks that were taken over by the government after financial crisis struck Thailand in 1997, and intensive negotiations over the terms. "It shows that the deals can be done and what has been going on is negotiation about the price and not avoiding the issue, which a lot of people thought" was the case, said Kenneth Ng, head of research at ING Barings in Bangkok.

To clinch the deal, Standard Chartered has doubled theamount it offered in its original bid announced in April. But officials declined to reveal other key components of the sale, such as the loss-sharing provisions. "It's obviously a better deal than the last one for the [government]," NG said.

"It's a completely different deal and we're very happy with it," Standard Chartered's Dowling said. In its April offer, Standard Chartered offered 6.2 billion baht for a 68.4 per cent stake in Nakornthon, leaving the development fund to inject 13.3 billion baht for a 20 per cent stake. That deal called for existing shareholders to write down their stake but allowed them to keep 11% after providing 800 million baht in new funds.

The Wall Street Journal