National Bank of Kuwait (NBK) moved a step closer to a takeover of Kuwait's Boubyan Bank on Wednesday, but a disputed stake held by another bank remains an obstacle to the 2.1 billion US dollars deal.
The Boubyan Bank board gave its backing to its main shareholder, describing NBK's offer for the 52.7 percent stake it does not already own as "fair and suitable". However, NBK must still resolve the issue of a 19.2 percent stake held by Commercial Bank of Kuwait.
Investment Dar, a struggling Kuwaiti firm that is undergoing restructuring, sold the stake to CBK in 2008, with the right to buy it back. In 2009, CBK said Dar had lost that right and tried to sell on the open market, a move blocked by a Dar-requested court order.
"For NBK, its a matter of getting the CBK stake sorted out and gaining regulatory approval," a banking source said on Wednesday. "They have the support of Boubyan, so it's a done deal if these two things are taken care of."
NBK, Kuwait's largest lender, last week offered to pay 630 Kuwaiti fils per share for the 52.7 percent of Boubyan it does not own as it tries to boost its presence in Islamic banking in the Gulf region. If the tie-up is completed, the combined entity would hold assets worth about $57 billion.
Boubyan has hired consulting firm Protiviti to advise on the transaction, it said in a bourse statement on Wednesday.
Boubyan shares were trading down 1.6 percent at 620 fils on the Kuwait bourse Wednesday, while NBK shares were down 1.9 percent at 0915 GMT.
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