Bank Dhofar SAOG announces intention to make acquisition offer to Ahli Bank

FURTHER to Bank Dhofar SAOG disclosure on 18 May 2023 announcing the terms of a revised non-binding offer made to the board of directors of ABO on 26 April 2023 (the “Revised Offer”), having considered its options, the board of directors of Bank Dhofar SAOG (“Bank Dhofar”) at its meeting held on 23 May 2023 resolved to make an offer to acquire 100% of the issued share capital of ABO in a takeover pursuant to the Oman Acquisition and Takeover Regulations (Ministerial Decision No. 2 of 2019) (“Offer”) and to therefore withdraw our merger proposal.

The terms of the Offer will be identical to the terms previously outlined in our Revised Offer, and are summarised below:

1. Offer structure

The Offer provides all ABO shareholders with an option to elect to receive up to 25% of their consideration in cash (the “Cash Component”); the rest of the consideration will be paid in the form of newly issued Bank Dhofar shares (the “Share Component”). For ABO shareholders who are: (i) Sharia compliant juristic shareholders; or (ii) subsidiaries of Sharia compliant juristic shareholders, the Cash Component will be increased to 100% of total consideration received, to reflect their (or their parent shareholder’s) de jure inability to receive shares in a conventional bank.

Bank Dhofar envisages to fund the Cash Component of the Offer from its existing liquidity and capital resources as well as a contribution from Bank Dhofar’s existing shareholders, if and as required.

2. Financial terms

The financial terms of the Offer are set forth as follows: • 1.2910 Bank Dhofar ordinary shares per ABO share (the “Swap Ratio”), valuing each ABO share at OMR 0.200 based on the Bank Dhofar closing share price of OMR 0.155 as at 9 April 2023 (the “Bank Dhofar Unaffected Share Price”)

• OMR 0.200 per each ABO share as the Cash Component

The above represents:

• A premium of 15.0% to ABO’s closing share price of OMR 0.174 as at 9 April 2023 (the “ABO Unaffected Share Price”);

• An implied Price to Q1 2023 Book Value multiple of 1.30x.

Since the submission of our initial non-binding offer to the board of directors of ABO on 10 April 2023 (the “Initial Offer”), Bank Dhofar’s share price has appreciated. As a result, for the Share Component, this appreciation translates into a significant increase in the value of each ABO share under the agreed Swap Ratio of 1.2910. As at closing share prices on 17 May 2023, the Swap Ratio of our Revised Offer now represents:

• A premium of 30.6% to the ABO Unaffected Share Price, valuing each ABO share at OMR 0.227 based on the Bank Dhofar closing share price of OMR 0.176;

• An implied Price to Q1 2023 Book Value multiple of 1.48x, by far exceeding the average Price to Book Value multiple of the Omani banking sector.

For the avoidance of doubt, the Cash Component values each ABO share at OMR 0.200.

3. Strategic Rationale

After completion of the Takeoveroffer,

Bank Dhofar will look to effect a combination with ABO. We believe that a combination of Bank Dhofar and ABO is a compelling opportunity for ABO shareholders to: • Create a leading domestically-focused wholly owned Omani bank with a robust competitive position, well placed to serve the entirety of the market with leading market positions across a number of customer segments; • Combine the banks’ highly complementary activities and expertise across retail, corporate and Islamic banking for the benefit of the combined group and its customers; • Provide career development opportunities for both banks’ employees;

• Provide opportunities to create value for both sets of shareholders, notably through an improvement in the combined group’s cost of funds; and

• Provide enhanced liquidity for both sets of shareholders.

All in all, the proposed transaction offers an immensely attractive opportunity for shareholders of both entities to benefit from value creation with significant synergy possibilities and to participate in the long-term growth story, whilst ensuring a strong and well capitalized bank on day one.

We remain highly confident in our ability to successfully execute the contemplated transaction.

Any transaction, should it proceed, is subject to obtaining approvals from regulators and other applicable requirements.

A further announcement will be made if and when appropriate.