National Bank of Bahrain (NBB) has offered to acquire up to 100 percent of the issued and paid up ordinary shares of Bahrain Islamic Bank (BISB).

The voluntary conditional offer is subject to a minimum acquisition of 40.94 percent, which brings NBB’s total ownership of the issued share capital of BISB to a minimum of 70 percent.

The consideration of the offer is either in cash of 0.117 Bahraini dinar ($0.31) per share or through new shares in NBB at a share exchange ratio of 0.167 NBB shares per BISB share, NBB said in a statement.

“BISB shareholders are notified that NBB is a conventional retail financial institution and as such the new shares in NBB offered as an alternative to the cash offer are not a Shari’a compliant investment,” the statement by NBB said.

NBB first announced in October 2018 that it was considering buying shares in Bahrain’s largest Sharia-compliant lender. In the beginning of 2019, NBB said that consultations are still going with BISB on the voluntary takeover.

In September 2019, BISB set up an independent committee of its board of directors to evaluate a voluntary takeover offer by rival NBB.

NBB is the second largest Bahraini bank by market capitalisation behind Ahli United Bank, which accounts for 27.94 percent of the total market capitalisation on the exchange.

The government of Bahrain and NBB each hold 29.06 percent of BISB’s shares (309.22 million shares each) according to data from Refinitiv’s Eikon, while Islamic Development Bank holds 14.42 percent and the Government of Kuwait’s stake amounts to 7.18 percent.

(Reporting by Gerard Aoun; editing by Seban Scaria)

(gerard.aoun@refinitiv.com)

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© ZAWYA 2019