Dubai Islamic Bank is set to completely acquire Islamic mortgage provider Tamweel through a share swap deal, in which it already holds a majority stake of 58.2%.
In order to gain full ownership over the firm, the bank is planning to launch a tender offer to purchase the remaining share of 41.8% from Tamweel’s other shareholders.
Following approval from all regulators, including the Ministry of Economy, the Securities and Commodities Authority of the UAE, the UAE Central Bank and the Dubai Financial Market, the date of the offer will be soon announced.
Based on terms of the deal, each Tamweel shareholder will be offered 10 DIB shares for every 18 Tamweel shares.
According to an assessment by Price Waterhouse Coopers, the fair market value of both DIB and Tamweel stood at AED2.25 and AED1.25, respectively, as at 30 September 2012.
DIB deputy chief executive officer Dr Adnan Chilwan was quoted by Khaleej Times as saying that both parties will benefit from the move and that after the takeover, the bank will able to combine the mortgage portfolio at one place.
"It’s our intention and needs a lot of regulator approvals. Once we get the approvals, the transaction will be confirmed," Chilwan added.
Upon completion of the share swap offer, the bank is expected to apply to UAE Securities and Commodities Authority for the delisting of Tamweel shares from the Dubai Financial Market.