Dubai Islamic Bank (DIB) has announced that its board has approved plans to buy 100 percent of mortgage provider Tamweel, in which it already holds a majority stake of 58.2 percent.
Dubai's largest sharia-compliant lender said in a statement that it intends to make a tender offer to buy all shares in the hands of Tamweel's other shareholders.
Each Tamweel shareholder will be offered 10 DIB shares for every 18 Tamweel shares. After closing the offer, DIB will apply to the regulator to delist Tamweel from the Dubai Financial Market, the statement said.
It is the intention of DIB, subject to obtaining necessary approvals from shareholders, to issue new shares by way of a capital increase of the bank’s issued share capital.
Upon approval of all regulators, the date of the offer will be communicated individually to all Tamweel shareholders giving them adequate time to respond to the offer, DIB added.
"The bank is confident that this offer serves the best interest of shareholders in both entities," the statement said.
In April 2011, DIB paid AED374.7m to buy a controlling stake in Tamweel.
Dubai Islamic paid AED318.6m in cash and AED56.1m in treasury shares for the stake, according to the bank’s annual report.
The lender raised its share in Tamweel to 58.3 percent from 21 percent.