MUSCAT - Following on from its submission of a revised non-binding merger proposal to Ahli Bank on Wednesday, Bank Dhofar on Thursday outlined the terms of its offer, stressing that the synergies unleashed by the merger would bestow substantial benefits upon the shareholders of both establishments.

The proposed offer extends to all Ahli Bank shareholders, granting them the liberty to elect to receive up to 25 per cent of their consideration in cash, with the remaining allocation disbursed through freshly issued Bank Dhofar shares.

However, shareholders categorised as Sharia-compliant juristic shareholders or subsidiaries thereof will receive the entire consideration in cash, on account of legal restrictions governing their involvement with conventional banks.

With regard to the financial terms underpinning the offer, Bank Dhofar seeks to exchange approximately 1.2910 of its ordinary shares for each Ahli Bank share, valuing each Ahli Bank share at RO 0.200, predicated on the Bank Dhofar Unaffected Share Price of RO 0.155 as of April 9, 2023.

In addition, a cash component of RO 0.200 per Ahli Bank share is proposed.

This offer reflects a premium of 15.0 per cent over Ahli Bank’s closing share price of RO 0.174 as of the aforementioned date, together with an implied Price to Q1 2023 Book Value multiple of 1.30x, Bank Dhofar satated.

Significantly, Bank Dhofar's share price has appreciated substantially since the initial offer was unveiled on April 10, 2023.

At present, the revised swap ratio comes with a premium of 30.6 per cent over the Ahli Bank Unaffected Share Price, valuing each Ahli Bank share at RO 0.227, based on the Bank Dhofar closing share price of RO 0.176. This augmented ratio engenders an implied Price to Q1 2023 Book Value multiple of 1.48x.

To finance the cash component of the offer, Bank Dhofar envisages employing its existing liquidity and capital resources, supplemented by contributions from its incumbent shareholders.

The proposed transaction remains contingent upon the requisite approvals from pertinent regulators, in addition to the respective boards of directors and shareholders of both Bank Dhofar and Ahli Bank.

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