National Bank of Bahrain (NBB) made an announcement on Saturday that its offer to acquire Bahrain Islamic Bank (BISB) is now unconditional as 47.64 percent of BISB shareholders accept the buyout offer.
This means that NBB has met the mandated 70 percent ownership of BISB, a fact that was confirmed by SICO, a regional asset manager that is acting as an agent in the deal.
To secure the deal NBB was subject to a minimum acquisition of 40.94 percent of issued share capital of BISB, bringing NBB’s stake up to 70 percent, a figure it exceeded on December 31, 2019.
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 final closing date for shareholders of BISB who want to participate is January 15, 2020, with participating shareholders to receive their payment in cash or shares on January 22, 2020.
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.