The $132m stake in Oman's biggest mortgage lender trumps a takeover offer by Bank Muscat.
Ahli United Bank said on Saturday it would pay 50.9 million rials ($132 million) for a 35% stake in Oman's biggest mortgage lender, trumping a takeover offer by Bank Muscat.
Bahrain's largest lender by market value said it had signed a memorandum of understanding with Alliance Housing Bank to buy the stake through subscription to a capital raising by the Omani lender. It gave no further details.
If Alliance Housing, which was targeted by Bank Muscat last month, issued enough shares to give Ahli United a 35% stake, it would have to sell 113 million new shares on top of its 210 million shares outstanding.
That would value Alliance's bid at about 0.450 rials per share, a 19.8% premium on its closing share price on Thursday. Bank Muscat offered 0.375 rials per share offer until it declared the offer void on Thursday.
Ahli United said the deal is subject to approval by Omani and Bahraini authorities.
Alliance said on Monday it had asked Egyptian investment bank EFG-Hermes to study takeover offers.
Alliance's biggest shareholder, Oman National Investment Holding, said last month it was looking for a higher price after Bank Muscat made its offer.
Separately, Kuwait's Tamdeen Investment Co. said on Saturday it is studying plans to sell its stake in Ahli United Bank, which itself has been named by newspapers as takeover target.
"Tamdeen is currently studying... selling all its shares in Ahli United Bank and the effect of that on the firm's current and future profits," the firm said in a statement on the bourse website.
Al Rai daily, citing unnamed sources, said on Saturday Kuwait Projects Co. (KIPCO) and a Saudi bank are competing to buy a majority stake in the Bahrain lender.
Al-Qabas newspaper said on June 2 an unidentified Kuwaiti investment group had made an offer to buy 51% of Ahli United.
Ahli United Bank said on May 21 it was not aware if reports an investor was planning to buy a majority stake were accurate or not.
The bank issued a similar statement in April, when a Qabas report said unidentified Arab and international banks had made offers to buy a strategic stake in AUB, and that one suitor was willing to pay $2 a share.
The bank's shares have soared 26% in the past four weeks on repeated takeover speculation. Shares of Alliance have gained 39% in the past month.