Bahrain investment bank Gulf Finance House (GFH) is in the final stages of acquiring full ownership of Khaleeji Commercial Bank, in what will be one of the bigger consolidations within the Gulf’s finance sector this year. The investment bank will boost its portfolio and expand its operations through this strategic investment.
GFH will pick up the remaining 21.03% stake in Al Khaleeji Commercial Bank which it currently does not own through a share swap arrangement. This will be done by buying 187.58 million shares.
“GFH intends to maintain KHCB’s vocation as an Islamic retail bank,” it said in a statement. “KHCB will continue to operate under its normal course of business and maintain its operations as a subsidiary of GFH.”
KHCB will provide its Bahraini investment bank with a wider segment of clients and allow for a bigger market share.
GFH, which has more than $12 billion in assets and funds under management, increased its shareholding in KHCB earlier this year to more than 69% after it bought shares from Dubai-based Shuaa Capital and the Goldilocks Fund, which is managed by a Shuaa subsidiary. GFH bought Shuaa Capital’s direct 3.8% stake in KHCB and its 9.76% indirect shareholding from the Goldilocks fund, equal to more than 87 million shares. The Bahrain-based Sharia compliant lender, which owned a 55.41% stake in KHCB before the deal, paid more than 8.76 million Bahraini dinars ($23.3 million) for Shuaa’s combined shareholding, it said earlier this year.
If the Bahraini lender secures a shareholder acceptance of 90% to acquire KHCB shares, then it intends “to exercise any rights of compulsory acquisition, which may become available to it”, it said. The remaining shareholders, who have not accepted the acquisition offer, shall be obliged to sell their shares to GFH no later than three months from the date of GFH having obtained 90% or more acceptances.
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