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Thu 10 May 2007 12:20 AM

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Kuwait's CBK rejects offers on price

CBK says offered prices do not reflect fair value of its share price, but the door is still open.

Commercial Bank of Kuwait said on Wednesday talks with local and international investors about taking a "significant" stake in the lender ended without agreement over differences on price.

"The offered prices do not reflect the fair value of the share price and do not fit with the bank's future directions," Kuwait's third-largest lender said in a statement, without identifying the suitors.

Still, the lender left the door open for a deal and said it was ready to "receive and study" future offers for a cooperation, according to the statement published after trading hours.

Local newspapers had named Qatar National Bank, Commercial Bank of Qatar and Kuwaiti investment bank Global Investment House as possible suitors for CBK.

On Wednesday, al-Watan daily reported that unidentified Qatari investors may buy 60 percent of CBK for 2.6 dinars each, prompting the bank to issue a denial which knocked down its stock by 6.5 percent as takeover fantasy faded.

Chairman Abdul-Majeed al-Shatti told Reuters a month ago the bank was considering a stake sale, merger, alliance or takeover with a foreign or local investor, triggering a rally in its stock price.

Shares of CBK had surged 24 percent in the four days to Sunday's close on talk that Qatar National Bank was in talks to takeover the lender.


Shatti told Reuters in April the bank had formed a committee to look into offers with the purpose of boosting CBK's shareholder value.

The bank said this committee had now concluded its task since no deal had been reached, adding: "Commercial Bank of Kuwait assures that it is ready to receive and study any offer for a cooperation if may get in the future."

Analysts, including Mustafa Behbehani, director of Kuwait Gulf Consulting Co., have said a tie-up with a Qatari bank could help CBK become a regional player.

Like other Gulf banks, CBK, which offers retail, corporate and investment banking services, has expanded abroad to compensate for increasing competition at home, mainly from National Bank of Kuwait, the country's biggest lender.

The bank is active in Iraq and Syria, and aims to take control of Bank of Bahrain & Kuwait, in which it was the biggest shareholder, CBK said in its 2006 annual report.

CBK's biggest shareholder is Sharq Holding, which holds 23.11 percent, according to the Kuwaiti bourse Web site.

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