Dubai: Samba Financial Group jumped in Saudi Arabia after rival National Commercial Bank, the kingdom's largest lender by assets, offered to acquire it for as much as $15.6 billion.
The Samba shares advanced 9.9% to 26.30 riyals as of 10:16 a.m. in Riyadh, while National Commercial Bank rose 7.3%. National Commercial Bank proposed paying as much as 29.32 riyals per share for Samba, a premium of about 27.5% to its closing price on Wednesday.
Saudi Arabia has been taking steps to shore up its banking sector from the double whammy of the coronavirus shock and lower oil prices. Lenders in the world's largest oil exporter are expected to be hit hard as lockdown measures and lower spending impact earnings.
Saudi Arabia's Public Investment Fund is the major shareholder of both lenders, with a 44.3% stake in National Commercial Bank and 22.9% of Samba. The combined bank would have assets of about $210 billion, making it the third-largest in the Middle East behind Qatar National Bank QPSC and First Abu Dhabi Bank PJSC, according to data compiled by Bloomberg.