International Finance

NBB to acquire 100% of Bahrain Islamic Bank’s paid up shares

NBB Bahrain Islamic Bank
On offer: Cash or a share-swap with an exchange ratio of 0.167 NBB shares per Bahrain Islamic shares

The National Bank of Bahrain (NBB) has offered to buy 100 percent of issued and paid up shares in Bahrain Islamic Bank (BISB), according to local media reports.

The NBB said in a statement that the consideration of the offer is either in cash of $0.31 per share or through a share-swap deal with a share exchange ratio of 0.167 NBB shares per Bahrain Islamic Bank shares.

The offer is subject to a minimum acquisition of 40.94 percent, which would take NBB’s total stake in Bahrain Islamic Bank up to 70 percent.

The deal to buy Bahrain Islamic Bank is expected to cost NBB around $329 million.

In the statement, NBB also said, “Bahrain Islamic Bank 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 Shariah-compliant investment.”

Currently, NBB, which is the second-largest bank in Bahrain with a market share of 27.94 percent, is the second-largest shareholder with a 29.06 percent stake in Bahrain Islamic Bank. While the Saudi Arabia-based Islamic Development Bank owns a 14.42 percent stake in Bahrain Islamic Bank, the General Council of Kuwaiti Awqaf holds a 7.18 percent stake.

NBB, which was also the first indigenous bank of Bahrain, first expressed interest in Bahrain Islamic Bank back in October 2018. Earlier in July this year, the bank again announced that it had re-initiated talks with the Islamic lender.

During the same period, NBB chief executive Jean-Christophe Durand revealed the bank’s plan to increase the number of branches in the UAE and Saudi Arabia and is looking to double the size of its debt capital market and advisory business to $10 billion.

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