Dubai: Dubai Islamic Bank (DIB) yesterday made a formal offer for Tamweel, the Islamic mortgage company in which it owns majority shares.
The offer follows the approval from the Securities and Commodities Authority (SCA). DIB currently has i 58.2 per cent of the issued equity of Tamweel.
This bid, which was announced on January 3, 2013, is based on the offer of 10 new DIB shares for 18 existing Tamweel shares held. The fair value of each share for DIB and Tamweel underlying the intended swap is set at Dh2.25 and Dh1.25 respectively. Analysts said the swap offer is below the book value of Tamweel.
DIB owned a strategic stake of nearly 21 per cent in Tamweel increased its shareholding in the company by acquiring additional shares from Dubai government owned entities. In September 2010, DIB took a controlling stake in Tamweel after acquiring 20 per cent from Dubai World’s investment arm Istithmar and about 17 per cent shares from Dubai Holding and its group companies.
After DIB’s acquisition of majority stake, Tamweel announced the resumption of mortgage financing.
Following the decision to make a formal offer, DIB said it will send Tamweel shareholders a copy of the offer, the offer statement and the acceptance form by mail.
“In order to participate in the offer, qualifying shareholders have to submit acceptance forms directly to an appointed broker or custodian. Acceptance forms for shareholders without any broker or custodian relationship will be accepted at the DIB head office, if delivered by hand and accompanied by valid proof of identification. The offer will remain open until 5pm on Saturday, March 16, 2013,” DIB said in a statement.