Business | Banking

DIB eyes full ownership of mortgage firm Tamweel

DIB, which currently owns 58.2% , says it will make a tender offer for remaining shares

  • Zawya Dow Jones
  • Published: 18:57 January 3, 2013
  • Gulf News

Dubai: Dubai Islamic Bank’s board of directors has approved a plan to take full ownership of Tamweel, an Islamic mortgage provider based in Dubai.

DIB, which currently owns 58.2 per cent of Tamweel, will make a tender offer for the remaining shares, it said in an emailed statement on Thursday.

Minority shareholders of Tamweel are to be offered 10 DIB shares for every 18 Tamweel shares they hold, the statement said, adding that the fair value of DIB shares in the swap was set at Dh2.25 ($0.61) and the Tamweel shares’ fair value was Dh1.25.

The bank bought a majority stake in Tamweel in 2010, rescuing it from two years of stasis following the Dubai property crash. The bank paid around $102 million to a coterie of large shareholders and began to integrate Tamweel into its own operations.

DIB is to seek shareholder approval to issue new shares via a capital increase as part of the swap, the statement said on Thursday. If given the nod by the UAE Ministry of Economy, the country’s markets regulator and the central bank, DIB will make the offer formally to existing Tamweel shareholders, it said.

The bank did not give any dates for the offer or its shareholders’ meeting. After the transaction closes, DIB will seek to delist Tamweel from the Dubai Financial Market, where it currently trades.

Tamweel shares topped the losers’ list on Thursday, falling 2.5 per cent to Dh1.19, while DIB’s stock rose 1.5 per cent to Dh2.06.

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