Kuwait’s Boubyan Bank weighs up $212m offer for BLME

Boubyan Bank is in advanced talks to buy UK-based Islamic lender Bank of London and the Middle East (BLME Holdings) in an all-cash deal.

The Kuwaiti lender is considering an offer of $1.05 for each BLME Holdings share, which values the UK bank at $212.1 million (Dh778.9m), according to a statement released by both entities. At that price, a bid would represent a 75 per cent premium to the $0.60 that BLME shares were trading at prior to the market’s close on November 28.

Boubyan Bank and a subsidiary already own more than 51.7 million shares, or a stake of 27.91 per cent in BLME. Although talks are ongoing, “there can be no certainty that an offer will be made for BLME,” Boubyan Bank said in the statement.

It also said it reserves the right to “make an offer for BLME on less favourable terms” but in line with market rules, it either needs to announce a firm intention to make an offer or withdraw from a deal by December 29.

BLME is a UK-based Islamic lender whose shares are listed on Nasdaq Dubai.

In the six months to June 30, the bank made a profit attributable to shareholders of £6.8m (Dh32.3m), down 1 per cent year-on-year as revenue grew 17 per cent to £27.8m.

A breakdown of its performance accompanying its results show the bank earned 75 per cent of its revenue from the UK and 8 per cent from Switzerland, but that much of the rest was generated in the Gulf, with 6 per cent coming from Saudi Arabia.

As at June 30, the bank had total assets of £1.4 billion, which were up 9 per cent in the six-month period, driven by “increased financing activities supported by diversified, consumer deposit-led funding”, it said.

Boubyan Bank’s net profit has increased by 12 per cent during the first nine months of 2019 to 45.3 million Kuwaiti dinars (Dh546m) as operating income grew 4 per cent to 109.4m dinars.

As at September 30, the bank had total assets of 5.03 billion dinars.