Muscat: After submission of the revised non-binding merger proposal to the Board of Ahlibank SAOG on April 26; BankDhofar SAOG announced further details of its revised non-binding offer of its merger proposal with Ahlibank SAOG.

The offer proposes the issuance of 1.2910 shares of BankDhofar ordinary shares for each share of Ahlibank. The proposed share swap ratio implies an attractive valuation of OMR 0.200 per share for Ahlibank based on BankDhofar’s unaffected share price of OMR 0.155 before the initial offer of the merger proposal as of April 9. The offer also entails an option for shareholders to opt for cash consideration for up to 25 per cent of their holding in Ahlibank at the offer price (OMR 0.200 per share).

The revised offer is a high-value accretive proposition for all Ahlibank shareholders. The offer price implies a 15 per cent premium to Ahlibank’s unaffected share price, before the submission and announcement of the initial merger proposal to Ahlibank Board. The offer price values the Ahlibank shares at 1.30x book value.

Moreover, based on the latest share price of BankDhofar, the proposed offer and share swap ratio implies a further increase in the effective value for each Ahlibank share to OMR0.227 per share, 1.48x book value and 30.6 per cent premium to Ahlibank’s unaffected share price (applicable to the 75 per cent share component as per the offered share swap ratio). Notably, the offer price reflects a substantial premium to the valuation multiples of the Omani banking sector.

For entities which are Sharia-compliant, (Sharia-compliant juristic shareholders and their subsidiaries), the proposed merger offer include a 100 per cent cash payout at an offer price of OMR 0.200 per share, taking into account the inability to hold shares in a conventional bank.

BankDhofar intends to fund the cash component of the offer from its existing liquidity and capital resources as well as a contribution from BankDhofar’s existing shareholders.

The terms of the revised offer for merger with Ahlibank demonstrate a strong commitment by BankDhofar SAOG, its board members and shareholders towards further strengthening of Omani banking sector offering an improved value proposition to all the stakeholders. The proposed merger offers an immensely attractive opportunity for shareholders of both entities to benefit from value creation with significant synergy possibilities and to participate in the long-term growth story, whilst ensuring a strong and well-capitalised bank on day 1.

The transaction is subject to obtaining necessary approvals from relevant regulators as well as boards and shareholders of BankDhofar and Ahlibank.

© Muscat Media Group Provided by SyndiGate Media Inc. (