Oman: Ahli Bank Oman (ABO) received acquisition offers from two consortiums where one is led by Oman International Development and Investment Company (Omnivest) and the other by Bank Dhofar.

Both consortiums have demonstrated a keen interest in acquiring Ahli Bank by revising their previous offers. Omnivest and Bank Dhofar, both, submitted their revised statements by 24th May 2023.

Bank Dhofar’s Offer Structure

Bank Dhofar’s consortium aims to acquire 100 percent of the issued share capital of Ahli Bank through a takeover, in compliance with the Oman Acquisition and Takeover Regulations.

Shareholders of Ahli Bank will have the option to receive up to 25 percent of their consideration in cash, while the remainder will be paid in newly issued Bank Dhofar shares. In the case of Sharia-compliant juristic shareholders or their subsidiaries, the entire consideration will be provided in cash. This is because, under Islamic banking, these shareholders are not able to receive shares in a conventional bank.

Moreover, the financial terms of the offer include a swap ratio of 1.2910 Bank Dhofar ordinary shares per ABO share, valuing each ABO share at OMR 0.200 as the cash component. The revised offer represents a premium of 30.6 percent to the ABO Unaffected Share Price, reflecting the appreciation in Bank Dhofar’s share price since the initial offer.

Essentially, the proposed combination of Bank Dhofar and Ahli Bank aims to create a leading domestically-focused Omani bank with robust competitive positions across various customer segments. We can expect the merger to generate synergies, enhance liquidity, and create value for shareholders of both entities.

Bank Dhofar remains highly confident in its ability to successfully execute the transaction, pending regulatory approvals, and other necessary requirements.

Omnivest’s Offer Structure

The Ominvest-led consortium has put forth a revised offer to acquire up to 75% of the share capital of Ahli Bank, rather than the entire issued share capital. Omnivest

Now, the shareholders of Ahli Bank will receive an increased cash offer of 200bz per share. Hence, providing a “fair, equal, and attractive cash offer to all the shareholders of Ahli Bank to participate in and benefit from the offer”.

Currently, Ominvest, through its fully-owned subsidiary, owns 8.68 percent of Ahli Bank and aims to acquire up to 66.32 percent of the issued share capital.

As part of the revised terms, Ahli United Bank, a strategic long-term investor in Ahli Bank, will receive the offer price of 200bz per share in full for their 35 percent shareholding. Other shareholders will receive a minimum of 55.6 percent consideration in cash at the offer price of 200bz per share while retaining the remaining portion as shareholders until the intended merger with Oman Arab Bank.

The proposed offer will be funded by the consortium members, ensuring a positive foreign direct investment in Oman. Moreover, it will not impose constraints on Ahli Bank’s or Oman Arab Bank’s capital or lending ability.

Additionally, the consortium members bring significant experience in the financial services sector. Also, they are committed to providing strategic direction and supporting Ahli Bank’s growth. The offer is subject to approval from shareholders, the Central Bank of Oman, and other applicable requirements.

Comparative Analysis

Both consortia have revised their acquisition offers for Ahli Bank, presenting shareholders with different options.

Reporting their offer to the Muscat Stock Exchange, Omnivest commented, “‘The offer shall be pursuant to the Takeover Regulations and is subject to the approval of the shareholders, the Central Bank of Oman, and other applicable requirements”.

The Ominvest-led consortium offers shareholders the opportunity to retain a portion of their shares until the intended merger with Oman Arab Bank while receiving minimum cash consideration. On the other hand, the BankDhofar-led consortium aims to acquire the entire issued share capital of Ahli Bank, providing shareholders with the choice between cash and shares.

In the end, the outcome will depend on the decisions made by Ahli Bank’s shareholders and the necessary approvals from regulators.