National Bank of Bahrain (NBB) has made an offer to the Bahrain Islamic Bank (BisB) to acquire up to 100 percent of the bank. NBB currently has a 29.06 percent of BisB.
To secure the deal NBB is subject to a minimum acquisition of 40.94 percent of issued share capital of BisB, which would bring NBB’s total stake in the bank to a minimum of 70 percent.
In a release filed on the Bahrain Bourse, BisB said that this acquisition would need to be made at either cash of 0.117 dinars per share, or a shares exchange at a share ratio of 0.167 NBB shares per BisB share at the option of each shareholder.
This would place the minimum purchase value of the deal at BHD 50.97 million ($135.56 million) in cash, and the total value of the Islamic lender at BHD 124.49 million.
The deal comes amid a raft of mergers and acquisitions (M&A) within the Middle East banking and finance industry. In January, Abu Dhabi Commercial Bank, Union National Bank, and Al Hilal Bank agreed to a merger, creating the fifth-largest bank in the Gulf Cooperation Countries (GCC).
Fitch Ratings in August released a report indicating a likelihood of increased M&A activity among GCC Islamic banks. The ratings agency stated that the consolidation will ultimately be positive for the Islamic banking sector as it will lead to larger, stronger, and more efficient Islamic banks.