Emirates NBD to start share swap tomorrow

Dubai: Emirates NBD, the new company that is offering to acquire the shares of Emirates Bank International (EBI) and National Bank of Dubai (NBD) in exchange for shares in the merged entity, has announced that the offer will open tomorrow.

Emirates NBD yesterday released an offer document containing the terms of the offer.

The EBI and NBD's extraordinary general meetings (EGMs) will take place on September 5 and September 6, respectively.

The offer will be open from August 1 to September 17. During this period, EBI and NBD shareholders can accept the offer by completing the form of acceptance.

Ratio

The offer entails shareholders to exchange each EBI share for one in Emirates NBD, valuing the EBI shares at Dh 9.30 per share and each NBD share will be exchanged for 0.95 share in Emirates NBD, valuing the NBD shares at Dh8.84 per share as of July 1, 2007.

The exchange ratio of 0.95 equates to a 14 per cent premium to NBD's share price on March 5.

The merger terms have the support of the boards of both EBI and NBD and the Government of Dubai, which owns 76.62 per cent and 14.25 per cent equity stakes in EBI and NBD respectively. Post merger, the government will own 56 per cent share in the new entity.

"The board of directors of EBI recognises the importance of creating a UAE champion with the scale, financial strength and service quality standards to compete effectively in the increasingly dynamic and competitive UAE and GCC markets," said Ahmad Humaid Al Tayer, chairman of EBI.

The legal and company secretarial departments of the respective banks will manage acceptances of the offer by their shareholders.

"The board of directors of NBD believes that Emirates NBD will be well-positioned to capture attractive domestic and regional opportunities," said Abdullah Mohammad Saleh, chairman of NBD.