Ahli United Bank, Bahrain’s largest bank, said a Gulf entity, which it would not name, had agreed to buy 25 percent in the lender, in a deal estimated at about $1.32 billion.
AUB said on Tuesday Kuwaiti real estate and investment firm Tamdeen and other shareholders had agreed to sell the stake but the bank did not name the buyer, who would likely become the single largest shareholder in the bank if the deal is approved.
AUB said the shares would be sold at $1.10 each, 37.5 percent above its closing price of $0.80 on Tuesday on the Bahrain bourse and compared to a year low of $0.44 in January.
Reuters calculated the total price based on 4.78 billion shares trading on the Bahrain bourse on Monday.
AUB’s Bahrain listing ended 6.7 percent higher on Tuesday, taking its gains to 33 percent since March 28 as rumours of a stake sale spurred investors to buy into the stock.
Its Kuwait listing rose 4.6 percent and was up 29 percent over the same period. Tamdeen ended up 8.2 percent.
AUB had a market value of $3.6 billion based as of Monday based on its Bahrain listing, according to Reuters data.
In a statement to the Bahrain bourse, AUB said: “An agreement has been reached with the buyer stipulating that (Tamdeen) and other shareholders agree to sell a stake totalling 25 percent in Ahli United Bank within 60 days.”
An AUB spokesman declined to elaborate. Tamdeen officials were not immediately available for comment.
Shakeel Sarwar, head of asset management at a Bahrain based SICO investment bank, said: “It’s a very tricky position, the million dollar question is – who is the buyer?”
Whether the buyer will extend the offer to minority shareholders or whether it can bring operational benefits to AUB will be essential before knowing the advantages of the deal, Sarwar said.
Separately on Tuesday, the Central Bank of Kuwait officially allowed AUB to complete the renaming of its Kuwaiti branch to Ahli United Bank from Bank of Kuwait and the Middle East, after the unit converted to an Islamic bank from a conventional one. (Reuters)
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