MUSCAT: Oman International Development and Investment Company (Ominvest) on Wednesday confirmed that it has formed a consortium with major shareholders of Oman Arab Bank with the “firm intention” to make an offer for the entire issued share capital of Ahli Bank.

Ominvest leads the Consortium, and the offer will be made by certain entities separately controlled by Ominvest and Arab Bank plc. “Certain other investors have also expressed their intention to participate in the Consortium and offer at a later stage if required. As part of good governance and careful evaluation of material and price-sensitive information, Ominvest made appropriate disclosures on the Muscat Stock Exchange on 16 May 2023,” the statement from Ominvest said.

Commenting on the offer, AbdulAziz Al Balushi, the Group CEO of Ominvest, said, “The Consortium sees Ahli Bank as one of the best-performing banks in the Sultanate of Oman, with a capable leadership team and leading operating and risk systems. The Consortium members will be strong and committed anchor shareholders of Ahli Bank, supporting its growth during the intervening period and preparing it for a potential merger with OAB in due course, under the guidance of the esteemed Board of Directors of both banks.”

The offer price

The Consortium will put forward an attractive base offer price of 185 bz per share. This offer represents a premium of approximately 28% over Ahli Bank’s average one-year market price, 20% over its net book value as of 31 March 2023, 13% over its average six-month market price, and an 8% premium compared to the closing stock exchange price as of 31 March 2023.

Strong return on investment

Commenting on the offer price, AbdulAziz Al-Balushi said, “We believe our offer price of 185 bz per share is fair and represents a strong return on investment for the shareholders of Ahli Bank who wish to participate in the offer.”

Funding and FDI

The proposed offer will be funded in its entirety by Consortium members, meaning there is no constraint on Ahli Bank or OAB’s capital or lending ability as a result of the offer.

Commenting on Arab Bank and its long-standing contributions to the Sultanate, AbdulAziz Al-Balushi, said, “Arab Bank plc will support funding the transaction, which will result in positive foreign direct investment in Oman. Arab Bank plc currently has an investment valued at around OMR 172 million in the Sultanate of Oman, including their recent investment of around OMR 46 million at the time of the merger of Alizz Islamic Bank with OAB in 2020. Arab Bank intends to further invest a substantial amount in the Sultanate of Oman depending on the final outcome of this takeover offer.

“Arab Bank has been contributing to the development of Oman’s economy for more than 50 years and remains committed to further driving the growth of the Omani banking sector and economy in accordance with Oman Vision 2040.”

He added, “Ominvest has a strong track record of successfully executing large and complex transactions in excess of OMR 385 million in the recent past. We are thankful to the regulatory authorities for their continued support and guidance, without which these transactions would not have been possible.

“Given the combined track record and strength of Ominvest and Arab Bank, we are optimistic that this acquisition will be a success, and we look forward to working with all stakeholders of Ahli Bank and the concerned regulatory authorities to outline the next phase of the acquisition process.”

“Following a successful merger, the new combined banking institution will gain size and scale as well as be better positioned to meaningfully contribute to the economic development of the Sultanate, supporting larger government projects of national interest,” stated AbdulAziz Al-Balushi.

“Furthermore, the Islamic window of Ahli Bank will be transferred to Alizz Islamic Bank, which is a fully owned subsidiary of OAB. This will provide additional scale and a significant boost to Alizz’s operations.”

The Group CEO added, “We look forward to the support of the regulatory bodies represented by the Central Bank of Oman and Capital Market Authority for the offer we have presented. Ominvest has a long history and extensive experience efficiently managing merger and acquisition operations. I am confident that the successful acquisition of Ahli Bank will mark another success story in our distinguished record spanning over 40 years.”

Meanwhile, Bank Dhofar on Wednesday revised its non-binding merger offer to Ahli Bank.

Commenting on Bank Dhofar’s offer, AbdulAziz Al-Balushi said, “We extend our well wishes to all parties involved. Our foremost commitment is to support the deal or initiative that serves the best interests of the country, the banking sector, and all stakeholders, not just ourselves. We firmly believe that Ahli Bank’s shareholders should have the opportunity to make an informed decision about what is best for them.”

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