DUBAI: Ahli United Bank (AUB), Bahrain's largest bank, said a Gulf entity, which it would not name, had agreed to buy 25 per cent in the lender, in a deal estimated at about $1.32 billion.
AUB said yesterday Kuwaiti real estate and investment firm Tamdeen and other shareholders had agreed to sell the stake but the bank did not name the buyer, who would likely become the single largest shareholder in the bank if the deal is approved.
The bank said the shares would be sold at $1.10 each, 37.5pc above its closing price of $0.80 yesterday on the Bahrain bourse and compared to a year low of $0.44 in January.
Reuters calculated the total price based on 4.78bn shares trading on the Bahrain bourse on Monday.
AUB's Bahrain listing ended 6.7pc higher yesterday, taking its gains to 33pc since March 28 as rumours of a stake sale spurred investors to buy into the stock. Its Kuwait listing rose 4.6pc and was up 29pc over the same period. Tamdeen ended up 8.2pc.
AUB had a market value of $3.6bn as of Monday based on its Bahrain listing.
"An agreement has been reached with the buyer stipulating that (Tamdeen) and other shareholders agree to sell a stake totalling 25pc in AUB within 60 days," the bank said.
"It's a very tricky position," said Shakeel Sarwar, head of asset management at Bahrain-based SICO investment bank. "The million-dollar question is who is the buyer?"
Whether the buyer will extend the offer to minority shareholders or whether it can bring operational benefits to AUB will be essential before knowing the advantages of the deal, Mr Sarwar said.
Meanwhile, the Central Bank of Kuwait yesterday allowed AUB to complete the renaming of its Kuwaiti branch to Ahli United Bank from Bank of Kuwait and the Middle East, after the unit converted to an Islamic bank from a conventional one.