Deal's off: Oman's Bank Dhofar and Bank Sohar abandon merger plans
The decision to walk away from the merger comes four months after the banks agreed terms of the share-swap ratio for the deal. (Twitter)
Bank Dhofar said that its board has decided to discontinue its negotiations with Bank Sohar for the proposed merger.
Both banks have been unable to reach an agreement on certain key issues relating to the completion of the proposed merger, said Bank Dhofar in a disclosure statement posted on MSM website.
“With reference to the board's previous announcement regarding the proposed merger of Bank Dhofar and Bank Sohar (proposed merger) dated June 8, 2016, we would like to inform you that both banks have been unable to reach agreement on certain important key issues relating to the completion of the proposed merger,” the statement said.
The decision to walk away from the merger comes four months after the banks agreed terms of the share-swap ratio for the deal, according to a Bloomberg News report. Each Bank Dhofar share would have been exchanged for 1.29 shares of Bank Sohar, both banks said in June. The combination would have created Oman’s second-largest bank after Bank Muscat, which has assets of $34 billion.
There was no trading in Bank Dhofar shares on the Muscat Securities Market on Sunday.
Meanwhile, Bank Dhofar’s rights issue is open for subscription between October 5 and 19. The bank is offering its shares to existing shareholders at 276 baisas per share, with the shareholders eligible to subscribe to 105 new shares for every 1,000 shares held.
Bank Dhofar last week said that the bank’s net profit for the first nine months of 2016 grew by 10.42 per cent to OMR36.87 million, from OMR33.39 million for the same period of 2015.
The bank’s net loans and advances to customers during January-September period of 2016 also moved up by 10.91 per cent to OMR2.92 billion from OMR2.64 billion for the same period of last year. Also, deposits from customers increased by 9.4 per cent to OMR2.79 billion from OMR2.55 billion.
The operating expenses of the bank grew by 8.37 per cent to OMR41.63 million from OMR38.41 million during the period under review.
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