Muscat – Oman International Development and Investment Company (Ominvest) is planning to lead a consortium that will make an offer to acquire the entire issued share capital of Ahli Bank.

“The Ominvest board, at its meeting held on Monday, resolved to announce the intention for Ominvest to lead a consortium that will make an offer for the entire issued share capital of Ahli Bank,” Ominvest said in a disclosure to the Muscat Stock Exchange.

It said the offer will be made by certain entities separately controlled by Ominvest and Arab Bank (consortium), adding that certain other investors have also expressed their desire to join the consortium.

Ominvest said that the consortium shall be a committed anchor investor who will support Ahli Bank’s growth and provide further strategic direction.

According to the disclosure, the consortium will make a cash offer of 185bz per share (base offer price) for Ahli Bank. The consortium does not anticipate incorporating any conditions regarding the percentage of acceptance by shareholders of Ahli Bank.

The base offer price represents a premium of approximately 28 per cent over Ahli Bank’s average one-year market price of 144bz and an 8 per cent premium compared to the closing stock price for Ahli Bank as of March 31, 2023.

“We believe that the offer is attractively priced,” Ominvest noted in its disclosure.

For the purpose of this shares acquisition offer, Ominvest has categorised the Ahli Bank shareholders into three categories: (i) strategic long-term investors, holding more than 25 per cent shareholding, who provide strategic direction and assistance in the transformation of Ahli Bank; (ii) significant financial investors, holding between 10 and 25 per cent shareholding, who have significant influence over Ahli Bank and participate in its policy-making process; and (iii) other investors, holding less than 10 per cent shareholding.

Under the terms of the offer, Ahli Bank shareholders who accept the offer will be entitled to receive as follows: strategic long-term investors will receive the base offer price plus 15bz; significant financial investors will receive the base offer price plus 7bz; and other investors will receive the base offer price.

According to Ominvest, the premium over the base price is to compensate strategic long-term and significant financial investors for the loss of significant influence over Ahli Bank as a result of selling their shares. This is based on the concept of a control premium paid for large blocks of shares.

Ahli Bank-OAB merger

Ominvest informed that the members of the consortium already have a substantial stake in Oman Arab Bank (OAB), and the acquisition of Ahli Bank is viewed as a strategic opportunity to further strengthen Ahli Bank in advance of its potential future merger with OAB.

“This merged entity, subject to regulatory and other approvals, will create a large and robust financial institution in Oman,” Ominvest added.

Following the announcement about the offer, Ahli Bank shares rose more than four per cent at the Muscat Stock Exchange, while OAB shares jumped 9.3 per cent on Tuesday. Ominvest shares, however, closed two per cent lower for the day.

Ominvest pointed out that the proposed offer shall be funded by the members of the consortium from their own funding sources, thereby resulting in a positive foreign direct investment (FDI) in Oman.

“The offer is subject to the approvals of the relevant boards, shareholders, regulators, and any other applicable requirements. Further information shall be provided in due course and in line with the Takeover Regulations and disclosure requirements,” Ominvest added.

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