Bestway has reportedly paid Rs 19.2 billion (around $224 million) for 240 million shares @ Rs 80 per share for the acquisition. ADG will retain 10.3 percent stake in the consortium. UAE's Minister for Higher Education and Scientific Research Shaikh Nahayan Mabarak Al-Nahayan will continue as Chairman UBL and Sir Anwar Pervez as Vice Chairman of the bank with an unchanged Board of Directors until October 2011.
Continuity of partnership between the UK and UAE groups is reflective of a stable seven-year relationship and it allays all misgivings and uncertainty, which had cropped up since ADG's bid to raise liquidity for future investment in its telecom venture - Warid/Wateen, say some market watchers. It also removes the dark shadow over Bank Al-Falah and brings to an end all kinds of rumours that the Abu Dhabi's big business party having $800 million investment in Pakistan may be looking for an exit, these sources added.
Since the ownership structure of UBL remains unchanged, a similar offer from "Bestway" to other minority shareholders is not envisaged. ADG had appointed Morgan Stanley as Advisors for this sale. An initial offer of Rs 70 per share for purchase of 24.5 percent shares of UBL was received from Chairman Nishat Group and MCB Bank Ltd. Mian Mohammad Mansha. Subsequently, the offer was reportedly revised to Rs 75 per share. Bestway Group had the first right of refusal under the joint venture agreement, between the two partners, which was duly exercised.
On his last visit to Pakistan, for a board meeting of the bank, Sir Pervez reportedly obtained the blessing from the regulator - State Bank of Pakistan. According to knowledgeable sources, Bestway (Holding) is a cash rich group with sound bank lines in the UK. They are expected to fund this deal from overseas assets. ADG had paid $100.5 million for 25.5 percent stake in UBL in 2002. Subsequently, in 2005, ADG paid an additional $100 million for 4.8 percent acquisition in the GDR issue.
A press release issued by UBL states: "The Abu Dhabi Group ("ADG") is a shareholder of United Bank Limited ("Bank") holding approximately 25.5% of the issued and outstanding ordinary shares of the Bank and 4.8% of the Global Depository Receipts issued by the Bank.
ADG has, subject to all regulatory approvals, entered into a Share Purchase Agreement dated December 28, 2010 with Bestway (Holding) Limited ("Bestway") being an existing shareholder of the Bank, for the sale of 20% of the issued and outstanding ordinary shares of the Bank.
"Both Bestway and ADG have applied to the State Bank of Pakistan in order to obtain its approval to proceed with the sale and purchase of the ADG Shareholding. "UBL is one of Pakistan's largest private banks with an asset base of Rs 650 billion, advances at Rs 344 billion, over Rs 500 billion in deposits, CAR of 14.4% and an EPS of 8.7x. It has an extensive network of over 1,100 branches in Pakistan and a strong presence overseas with 17 branches, three representative offices, a subsidiary and two joint ventures in 11 countries.
"With a wide-ranging and dynamic portfolio of globally competitive products and services, and a proven track record spanning over half a century, UBL today is at the forefront of the banking sector in Pakistan as well as in the region. "Going forward, the Bank will continue to focus on strengthening its balance sheet through the acquisition of low cost deposits and improvement in asset quality, as well as grow its international business in a secure and selective manner."