Board of KFH and AUB have approved final share exchange ratio. Andrew Henderson / The National
Board of KFH and AUB have approved final share exchange ratio. Andrew Henderson / The National
Board of KFH and AUB have approved final share exchange ratio. Andrew Henderson / The National
Board of KFH and AUB have approved final share exchange ratio. Andrew Henderson / The National

Boards of Kuwait Finance House and Ahli United Bank agree terms of possible merger


Sarmad Khan
  • English
  • Arabic

The boards of Kuwait Finance House and Ahli United Bank agreed on a share swap ratio, a crucial step in the former's bid to take over its smaller Bahraini counterpart and create a combined Islamic banking entity with $96.7 billion (Dh354.7bn) in assets.

The Bahraini entity said its board approved a final exchange ratio between the two lenders of one KFH share for every 2.325581 AUB shares, AUB said in a statement to Boursa Kuwait, where its shares trade.

“Approval of the … share exchange ratio does not imply that an official acquisition offer has been made by KFH,” AUB said.

The announcement follows KFH's statement last Thursday approving the terms, following due-diligence reports on AUB's books. A final decision on the deal is subject to approval from shareholders of both banks, central banks and other authorities in Kuwait and Bahrain, KFH said, without disclosing when a formal offer would be made.

The approved ratio is the same as the one announced in January, when the lenders hired HSBC and Credit Suisse as advisers to carry out financial and legal due diligence of each other’s accounts.

“Using that ratio, we calculate that AUB shares are trading at a 7 per cent discount to the share swap ratio- implied price,” Mohamad Al Hajj and Elena Sanchez-Cabezudo, equity analysts at Egyptian investment bank EFG Hermes, said in a research note on Sunday.

“This merger [assuming completion before May 2020] will increase KFH’s expected weight within MSCI Emerging Market Index by 8 basis points and increase expected flows in May 2020 by $370 million.”

KFH has tried to acquire AUB in the past, but talks stalled over a difference in valuation, Bloomberg reported.

Lenders in the Arabian Gulf are increasingly looking at mergers and acquisitions in a bid to gain scale and cope with tougher operating conditions against a weakening global economic backdrop. KFH’s bid to acquire AUB follows several recent merger deals in the Gulf, including the three-way tie-up between Abu Dhabi Commercial Bank, Union National Bank and Al Hilal Bank in the UAE.

Dubai Islamic Bank, the biggest Sharia-compliant lender in the UAE, is in the process of taking over its smaller rival Noor Bank, while National Commercial Bank in Saudi Arabia is pursuing a merger with its competitor Riyad Bank.

National Bank of Bahrain, a majority government-owned lender, is in discussions with Bahrain Islamic Bank about a potential offer for the Sharia-compliant entity as it looks to widen its client base and expand its reach into the Islamic banking market, it said in August.

Padmaavat

Director: Sanjay Leela Bhansali

Starring: Ranveer Singh, Deepika Padukone, Shahid Kapoor, Jim Sarbh

3.5/5

The%20specs%3A%202024%20Mercedes%20E200
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E2.0-litre%20four-cyl%20turbo%20%2B%20mild%20hybrid%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E204hp%20at%205%2C800rpm%20%2B23hp%20hybrid%20boost%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E320Nm%20at%201%2C800rpm%20%2B205Nm%20hybrid%20boost%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3E9-speed%20auto%0D%3Cbr%3E%3Cstrong%3EFuel%20consumption%3A%20%3C%2Fstrong%3E7.3L%2F100km%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENovember%2FDecember%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh205%2C000%20(estimate)%3C%2Fp%3E%0A
UAE currency: the story behind the money in your pockets
Labour dispute

The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.


- Abdullah Ishnaneh, Partner, BSA Law 

The specs

Engine: Dual 180kW and 300kW front and rear motors

Power: 480kW

Torque: 850Nm

Transmission: Single-speed automatic

Price: From Dh359,900 ($98,000)

On sale: Now

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
MATCH INFO

Uefa Champions League, Group C
Liverpool v Red Star Belgrade
Anfield, Liverpool
Wednesday, 11pm (UAE)

Lexus LX700h specs

Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor

Power: 464hp at 5,200rpm

Torque: 790Nm from 2,000-3,600rpm

Transmission: 10-speed auto

Fuel consumption: 11.7L/100km

On sale: Now

Price: From Dh590,000

About Okadoc

Date started: Okadoc, 2018

Founder/CEO: Fodhil Benturquia

Based: Dubai, UAE

Sector: Healthcare

Size: (employees/revenue) 40 staff; undisclosed revenues recording “double-digit” monthly growth

Funding stage: Series B fundraising round to conclude in February

Investors: Undisclosed

The specs

Engine: 2.0-litre 4cyl turbo

Power: 261hp at 5,500rpm

Torque: 405Nm at 1,750-3,500rpm

Transmission: 9-speed auto

Fuel consumption: 6.9L/100km

On sale: Now

Price: From Dh117,059

The specs

Engine: 2.0-litre 4-cylturbo

Transmission: seven-speed DSG automatic

Power: 242bhp

Torque: 370Nm

Price: Dh136,814

World Cricket League Division 2

In Windhoek, Namibia - Top two teams qualify for the World Cup Qualifier in Zimbabwe, which starts on March 4.

UAE fixtures

Thursday February 8, v Kenya; Friday February 9, v Canada; Sunday February 11, v Nepal; Monday February 12, v Oman; Wednesday February 14, v Namibia; Thursday February 15, final

GAC GS8 Specs

Engine: 2.0-litre 4cyl turbo

Power: 248hp at 5,200rpm

Torque: 400Nm at 1,750-4,000rpm

Transmission: 8-speed auto

Fuel consumption: 9.1L/100km

On sale: Now

Price: From Dh149,900

New schools in Dubai
Jetour T1 specs

Engine: 2-litre turbocharged

Power: 254hp

Torque: 390Nm

Price: From Dh126,000

Available: Now

SHADOWS%20AND%20LIGHT%3A%20THE%20EXTRAORDINARY%20LIFE%20OF%20JAMES%20MCBEY
%3Cp%3EAuthor%3A%20Alasdair%20Soussi%3C%2Fp%3E%0A%3Cp%3EPages%3A%20300%3C%2Fp%3E%0A%3Cp%3EPublisher%3A%20Scotland%20Street%20Press%3C%2Fp%3E%0A%3Cp%3EAvailable%3A%20December%201%3C%2Fp%3E%0A