MANAMA: Sico has been mandated by Kuwait Finance House (KFH) as Bahrain receiving agent, execution adviser and cross-listing adviser in KFH’s offer to acquire Ahli United Bank (AUB).
The cross-border acquisition would create a $104 billion regional banking powerhouse that is set to become the world’s largest Islamic bank in terms of assets.
“We are extremely proud to be making history through our role as one of the lead advisers on this transformational cross-border transaction,” said Najla Al Shirawi, chief executive of the regional asset manager, broker and investment bank.
“With a well-established reputation and proven capabilities in seamlessly executing some of the region’s most high-profile and complex deals which include structuring, underwriting and executing public and private equity capital transactions, Sico welcomes this opportunity to utilise its expertise on such an important deal that will create new value and regional opportunities for the merged entity.”
The acquisition will be implemented through a voluntary conditional offer by KFH to AUB shareholders to acquire 100 per cent of AUB’s issued and paid-up ordinary shares.
The offer by KFH is by way of share swap at an exchange ratio of one new KFH share for every 2.325581 AUB shares.
The offer is conditional upon KFH receiving valid acceptances for AUB shares representing at least 85pc of total issued share capital, and is subject to approvals, exemptions and/or waivers granted by the Central Bank of Bahrain.
“As a cross-border public takeover in Bahrain with simultaneous execution in Kuwait, paired with a 100pc share exchange structure and substantial offer conditions, our mandate requires significant synchronisation with numerous stakeholders and most importantly ensuring shareholders of AUB can take part in the offer in a seamless and efficient manner,” said Wissam Haddad, head of investment banking and real estate at Sico.
“As part of the non-waivable conditions within KFH’s offer, KFH will cross-list its shares on the Bahrain Bourse (BHB) as part of the successful closure of the transaction. Sico is assisting KFH as its mandated cross-listing adviser.”
Meanwhile, in a filing to BHB yesterday, KFH formally announced the voluntary conditional offer.
The offer document says the last date for trading in AUB shares will be March 22, to be immediately followed by suspension of trading the next day.
The offer will open on March 26 and the initial closing date will be April 15.
The final offer closing date is May 12, which is when the offer will be declared unconditional in all respects.
Following the successful implementation of the offer and acquisition of shares, KFH intends to maintain AUB’s commercial registration, however, KFH intends on changing AUB’s name to Kuwait Finance House - Bahrain in due course.
The principal change to be implemented immediately post-offer would be to commence the process of converting the business of AUB in Bahrain, Egypt, Iraq and the UK to Sharia compliant.
KFH will also begin converting AUB’s subsidiary in Kuwait to a digital bank as requested by the Central Bank of Kuwait.
Immediately after the completion of converting AUB’s business to Sharia compliant, KFH will begin the process of conducting a statutory merger to merge its two wholly-owned subsidiaries in Bahrain, being AUB and KFH Bahrain.
In a filing to BHB last month, KFH chairman Hamad Al Marzouq said: “The deal will give the bank an opportunity to access regional markets with a population of over 430 million people and a median annual per capita income of approximately $42,000 on the basis of purchasing power parity.”
He also said the acquisition will improve the quality of the new entity’s assets, high capital base, liquidity levels and capital efficiency at rates that exceed the regulatory requirements.
Regarding local competition, he said the new entity would have 31pc of market share at the level of the banking sector with its two conventional and Islamic divisions as against 26pc share held by KFH before the acquisition.
avinash@gdn.com.bh
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