Qatar National Bank has revealed itself as the mystery buyer that accumulated a huge stake in Commercial Bank International (CBI) last week.
"We would like to confirm that Qatar National Bank has increased its equity in CBI from 16.5 per cent to 39.9 per cent," CBI said. The bank did not provide financial details of the deal.
The lender, which is based in Dubai and listed on the Abu Dhabi Securities Exchange (ADX), baffled brokers on Sunday when more of the bank's shares traded in a single session than the entire daily turnover of the bourse on any day during the past four months.
The purchase "reflects the confidence in the prospects of the financial sector in the United Arab Emirates," QNB said.
The 23.4 per cent stake purchased is equivalent to 329 million shares and would be worth US$75 million (Dh275.4m) based on today's 84 fils share price.
The purchase follows a string of takeovers by QNB earlier this year, including sizeable stakes in banks in Iraq and Libya.
"This move is in line with the bank's international expansion strategy in the Middle East and Africa and reflects the confidence in the prospects of the financial sector in the UAE," QNB said.
Following an extraordinary general meeting on August 5, CBI raised the minimum number of shares that must be owned by UAE nationals from 20 per cent to 51 per cent, which was followed by a decree approving the measure from the Ministry of Economy.
The law came into effect on Sunday, when the first transaction took place.
When the ADX opened, 131.2 million shares of the bank were sold, equivalent in volume to a 9.3 per cent stake in the firm.
Despite the number of shares traded exceeding the entire trading activity of the ADX on any day in the preceding four months, the transaction resulted in a decline of just 1.9 per cent in the company's share price.
A further 58.3 million shares traded on Tuesday, representing a 4.1 per cent stake in the firm. On that occasion, the shares fell 9.7 per cent.
A further 141 million CBI stocks traded yesterday, representing a 10 per cent stake in the bank, and resulting in another 9.6 per cent share price dip.
The bank declined to comment on the transaction until yesterday, despite breaching the 5 per cent threshold that compels companies to disclose acquisitions.
A few hours later, QNB announced it had entered into discussions for the acquisition of Société Générale's holding in National Société Générale Bank - Egypt, amounting to 77.2 per cent of its paid-up capital.
The discussions are "in early stages", the bank said. NSGB had been the subject of analyst speculation as a potential takeover target for a cash-rich Gulf lender such as QNB because Société Générale has been forced to sell assets to shore up its capital requirements in the wake of the euro-zone debt crisis.
In June, the Securities and Commodities Authority (SCA) announced new regulations on disclosures during mergers and acquisitions.
The laws require an acquiring company to "immediately" notify markets if it intends to purchase more than 30 per cent of a company's stock "before offering the purchase order for execution on the trading floor".
The SCA declined to give a date for the implementation of the rules.
* with Bloomberg News
