Investment Dar to sell Madar stake

Kuwait's Investment Dar has reached an initial deal to sell its majority stake in al Madar Finance and Investment Co. to Stehwaz Holding Co. for 99.1 million dinars ($344 million), the bourse said on Wednesday.

Investment Dar, which plans to hike its stake in Islamic lender Boubyan Bank, said it expected a profit of 48.7 million dinars from the sale of the 65.95 % stake. Investment Dar shares closed up 1.7 % after the news.

The bourse said the sale price was set at 450 fils per share. There are 1,000 fils to the dinar.

The bourse said a public auction would be held on June 26 where the 220. 26 million Madar Finance shares would be offered at a starting price of 450 fils in line with rules governing the sale of large stakes.

Investment Dar said on Saturday it had won a central bank approval to raise its stake in Boubyan Bank to 20 %. It recently bought a stake in British luxury car maker Aston Martin.

"They need cash and I think it is a good move," said Mustafa Behbehani, director of Kuwait Gulf Consulting Co., referring to the company's plan to hike its 4.9 % stake in Boubyan.

Behbehani said buying into Boubyan was a good opportunity for Investment Dar because bank stakes were not often for sale.

"They went for the bank because banks in general are making good profits plus the other advantage is that Boubyan is Islamic," he said.

Competition among Islamic lenders is expected to heat up in the Gulf Arab state after the parliament approved government plans to set up a third Islamic bank with a capital of 100 million dinars.

In addition, Kuwait Real Estate Bank has said it will begin operating according to sharia as of July 1.

Boubyan, whose biggest shareholder is the government, made a first-quarter profit of 3.1 million dinars, almost double its profit in the year-earlier period.

Investment Dar, which has mandated Merrill Lynch to manage the al Madar deal, said the profit would be booked in the second quarter. In the first quarter, profit rose by 43 %. (Additional reporting by H. Hashim Ahmed)

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