MUSCAT: Bank Dhofar, a publicly listed company on the Muscat Stock Exchange, has received shareholder approval to increase its authorized capital and issued capital. The bank announced that its authorized capital has been raised from RO 500 million to RO 750 million. Additionally, Bank Dhofar disclosed that the increase in its issued and paid-up capital, from RO 299.635 million to RO 470 million riyals, will be used for an acquisition process.
The Board of Directors revised its proposal for merging with Ahli Bank on May 23. Under the revised terms, Bank Dhofar will acquire all shares of Ahli Bank. Shareholders will have the option to receive up to 25 perc ent of the payment in cash, with the remainder being compensated through shares issued by Bank Dhofar.
In consideration of sharia restrictions, certain shareholders and their subsidiaries will receive 100 percent of the payment in cash as they are unable to receive shares from a conventional bank. The swap ratio has been determined as an average of 1.291 ordinary shares of Bank Dhofar for each share of Ahli Bank. This ratio is based on the valuation of the Ahli Bank share at RO 0.2 and takes into account Bank Dhofar's closing share price of RO 0.155 as of April 9.
Bank Dhofar has mentioned a 15 percent premium over the closing price of Ahli Bank share on April 9, which was RO 0.174.
The cash portion of the acquisition will be financed through Bank Dhofar's existing liquidity, capital resources, and contributions from its current shareholders.
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