Unicorn mulls Dubai's Bank Islam stake
Manama, February 16, 2010
Bahrain's Unicorn Investment Bank has reiterated that it is mulling buying Dubai Group's stake in Malaysia's Bank Islam, but said a deal was not imminent as shareholders needed to agree on the right partner and price.
Dubai Group, an investment vehicle owned by the ruler of Dubai, said in October it was reviewing its options for the 40 percent stake in Malaysia's second largest Islamic bank as it shifts its focus closer to home.
"There is a degree of tension between the existing majority shareholder who would like the right partner, and the vendor who would like the right price," Frederick Stonehouse, head of strategic mergers and acquisitions at Unicorn told the Reuters Islamic Banking and Finance Summit in Bahrain.
Other shareholders in Bank Islam are BIMB Holdings and Tabung Haji.
Unicorn's chief executive Majid Al-Sayed Bader had told Reuters in October the bank was interested in buying the stake from Dubai, which is seeking to sell assets to meet its debt burden.
"We have received the information from the investment bank that is handling this for the seller. We have received it and we are reviewing it," Stonehouse said.
He also said the Islamic investment bank could raise between $250 million and $500 million in equity for acquisitions, while its strategic investment fund still has below $100 million to spend.
Unicorn is planning to buy a commercial bank to compliment its investment banking business, and Stonehouse said the bank is also studying opportunities in the Gulf region where banks' owners are looking to exit distressed assets.
But Stonehouse said Unicorn was not interested in taking a stake in Bahrain's Khaleeji Commercial Bank as it prefers banks with a longer track record such as Bank Islam.
Bahrain's Gulf Finance House owns a 37 percent stake in Khaleeji, and the loss-making investment house has said it is in talks to sell off assets to improve its funding position.-Reuters