GFH submits voluntary conditional offer to KHCB board

KHCB board is now required to send the offeree board circular to all its shareholders by November 25

  
A trader walks out of Bahrain Bourse after Joe Biden won the U.S. presidency, in Manama, Bahrain, November 8, 2020.

A trader walks out of Bahrain Bourse after Joe Biden won the U.S. presidency, in Manama, Bahrain, November 8, 2020.

REUTERS/Hamad I Mohammed

MANAMA: The GFH Financial Group has taken a key step in its plans to acquire the entire public shareholding of its Sharia-compliant commercial banking subsidiary, Khaleeji Commercial Bank (KHCB).

In a filing to Bahrain Bourse (BHB) yesterday, the investment firm said it has submitted a voluntary conditional offer to the board of directors of the Islamic bank last Thursday.

The KHCB board is now required to send the offeree board circular to all its shareholders by November 25.

GFH is seeking to acquire up to 187,589,034 ordinary shares of KHCB (constituting voting rights), not currently owned by it, representing up to 21.03 per cent stake of the Islamic retail bank’s issued and paid up share capital.

The consideration for the offer is shares in GFH, at a share exchange ratio of 0.914 GFH shares per KHCB share.

The share exchange element of the offer will be settled through treasury shares of up to 171,416,377 shares, or 4.5pc stake in GFH.

The firm said it intends to exercise any rights of compulsory acquisition, which may become available to it, if 90pc of shareholders accept the offer.

The remaining shareholders, who have not accepted the acquisition offer, shall be obliged to sell their shares to GFH, within three months.

If the full acquisition goes through then KHCB will become a direct wholly-owned subsidiary of GFH, which would lead to a delisting of the bank’s shares from BHB.

The offer opening and closing dates are yet to be announced, although the last date upon which the offer can be declared unconditional as to acceptances is January 3, 2022.

The GDN reported in June that GFH acquired 13.64pc additional stake in KHCB increasing its ownership from 55.41pc to 69.05pc.

The firm has pledged 336,134,454 KHCB shares to Sharjah Islamic Bank and also holds BD60 million additional tier 1 sukuk issued by the bank.

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