Offer follows approval from the Securities and Commodities Authority
Dubai Islamic Bank (DIB) has made a formal offer for Tamweel, the Islamic mortgage company in which it owns majority shares.
The offer follows the approval from the Securities and Commodities Authority (SCA). DIB currently has 58.2% of the issued equity of Tamweel.
The bid is based on the offer of 10 new DIB shares for 18 existing Tamweel shares held. The fair value of each share for DIB and Tamweel underlying the intended swap is set at $0.61 and $0.34 respectively. Analysts said the swap offer is below the book value of Tamweel.
DIB owned a strategic stake of nearly 21% in Tamweel. It increased its shareholding in the company, by acquiring additional shares from Dubai government owned entities. In September 2010, DIB took a controlling stake in Tamweel after acquiring 20 per cent from Dubai World’s investment arm Istithmar, and 17 percent shares from Dubai Holding and its group companies.
After DIB’s acquisition of majority stake, Tamweel announced the resumption of mortgage financing. Following the decision to make a formal offer, DIB said it will send Tamweel shareholders a copy of the offer, the offer statement and the acceptance form by mail.