Dubai Islamic bank to fully acquire mortgage firm Tamweel
DIB to make offer to Tamweel's shareholders of 10 DIB shares for every 18 Tamweel shares. Tamweel to be delisted after share swap
January 6, 2013 7:35 by Reuters
Dubai Islamic Bank said on Thursday that its board had approved plans to fully acquire its mortgage unit Tamweel, in which it already holds a majority stake of 58.2 percent.
Dubai’s largest sharia-compliant lender intends to make a tender offer to buy all shares off Tamweel’s other shareholders, it said in an emailed statement.
Each Tamweel shareholder will be offered 10 DIB shares for every 18 Tamweel shares. After closing the offer, DIB will apply to the regulator to delist Tamweel from the Dubai Financial Market.
DIB took a 57.33 percent stake in Tamweel in 2010, a move that rescued the mortgage lender, which was struggling during a crash of Dubai’s property market.
Tamweel’s current market value is about 1.19 billion dirhams ($323 million). DIB said it would seek shareholder approval to issue new shares; no date for the shareholder meeting was provided.
Before the announcement, shares of Tamweel ended 2.5 percent lower on Thursday while DIB was up 1.5 percent.
The mortgage firm is expected to be among the companies most affected by a new United Arab Emirates central bank regulation, introduced this week, to cap the size of mortgage loans for foreigners and local citizens. (Reporting by Praveen Menon; Editing by Andrew Torchia)