A $1.32 billion deal to buy a 25-percent stake in Bahrain lender Ahli United Bank (AUB) effectively ended on Monday after the bank's Kuwaiti shareholder Tamdeen rejected an unnamed buyer's request for more time.

Bahrain's largest bank said in April that Tamdeen and other shareholders had agreed to sell 25 percent in AUB, Bahrain's largest bank, to an unidentified buyer for a 37.5 percent premium to AUB's share price.

Further details on the deal that drove up AUB's share price 11 percent around the time of the announcement were never released.   

Tamdeen said in a statement to Bahrain's stock exchange on Monday that its board had rejected the request of the buyer to extend a six-month period for the deal to be sealed. It said the period had ended on December.1 but did not provide further details.   

There are no effective regulations on mergers and acquisitions in place in the Gulf region, and Kuwaiti newspapers often publish unsourced reports on deals that drive up share prices but never come through.

Tamdeen is controlled by the Kuwaiti Al-Marzouq family that has also two seats on AUB's board of directors.   

A source familiar with the deal told Reuters after the deal was announced that the buyer was a group of Qatari individuals that wanted to convert the bank to comply with Islamic law. - Reuters