DUBAI, June 2 Bank Dhofar has proposed
a preliminary share swap ratio and completed a study for its
possible merger with Bank Sohar, the latter said in a
statement on Monday.
It is the latest incremental step towards merging the two
lenders since Bank Dhofar, the sultanate's second largest bank
by market value, first approached its smaller rival about a
possible tie-up in July last year.
"Bank Sohar announces that it has received a letter from
Bank Dhofar, advising the completion of the preliminary study by
an external party," Bank Sohar said in a bourse filing.
"Bank Dhofar has proposed a preliminary swap ratio, which
will be subject to the completion of a due diligence exercise
and obtaining necessary approvals," it said, adding that the
board of Bank Sohar would now discuss the letter. It did not
reveal the proposed ratio.
A merger between the two banks would create Oman's second
biggest bank by asset value, with assets worth around 4.78
billion rials ($12.42 billion), according to first-quarter
Oman has seen one bank tie-up in recent years: HSBC Holdings
merged its Omani assets with Oman International Bank in June
2012 to create HSBC Bank Oman, currently the
sultanate's fourth-largest lender.
On the whole though, bank mergers are rare - both in Oman
and the wider Gulf - as main shareholders, who are often
prominent merchant families, are reluctant to cede control
except for vastly inflated valuations.
($1 = 0.3850 Omani Rials)
(Reporting by David French; Editing by Andrew Torchia)