A legal dispute has stalled plans by the National Bank of Kuwait (NBK), Kuwait’s largest commercial bank, to take over Egypt’s Misr America International Bank (MAIB), reported the Bahrain Tribune. The deal, which is valued at $105 million, is part of NBK’s regional expansion plan.
In a statement issued by NBK, the Kuwaiti bank stated that negotiations between the two sides had narrowed the contentious points to only a few, over which NBK felt it has no further room for maneuver. One of the points related to the inclusion in the share purchase agreement of references to the due diligence process, which the NBK legal team strongly advised against.
NBK, had earlier this year offered 531 Egyptian pounds, or $140, a share for the entire 750,000 MAIB shares. Now, because of the legal dispute, Credit Agricole Indosuez, a unit of Credit Agricole of France, is reportedly negotiating to take over MAIB at 420 pounds a share.
For NBK, the acquisition is part of a strategy for regional expansion, and despite the failure to reach a deal with MAIB, thus far, the Kuwaiti institution said it is still set entering the Egyptian market.
Misr America’s total assets equaled 1.02 billion pounds ($276 million) at the end of 1998, and that same year it reported a net profit of 30.15 million pounds, compared with 30.03 million pounds in 1997. The state-owned Misr Insurance has a 50 percent stake in MAIB, state-owned Banque du Caire holds 33 percent, with the Industrial Development Bank of Egypt holding most of the remainder. – (Albawaba-MEBG)