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Financials

UPDATE 1-Mubadala to become top Investcorp shareholder after 20 pct buy

* Mubadala buying 20 pct in two parts - statement

* Deal at similar value to $138 mln Sept. stake sale - co-CEO

* Talks ongoing with other institutional investors - chair (Adds detail, context)

DUBAI, July 28 (Reuters) - Abu Dhabi state investment fund Mubadala will become the largest shareholder of Investcorp after agreeing a deal to acquire 20 percent of the Bahrain-based alternative investment firm, it was announced on Thursday.

The purchase comes as Investcorp, with around $11 billion of assets under management, is implementing a new strategy aimed at catapulting it into the top tier of global investment firms by doubling its assets by 2022.

The firm has been busy in recent months, buying into Italian menswear company Corneliani and cyber security firm Coresec Systems, as well as numerous real estate assets in the United States.

Now, it has brought in Mubadala -- itself going through a transformation as it merges with fellow Abu Dhabi state fund International Petroleum Investment Company -- to help strengthen its investor base with institutional support, having traditionally been owned by wealthy Gulf families.

“Once we were clear in our mind on the vision that we want to take this firm to, and we decided what kind of partners we want to have, it became clear that Mubadala was one of the most important investors that we could work with,” Executive Chairman Mohammed al-Ardhi said on a media conference call.

Mubadala will buy 9.99 percent of Investcorp immediately, and a further 10.01 percent following regulatory approvals, which Ardhi expected would take around two months. He added Mubadala bought mostly treasury shares held by Investcorp and no existing shareholders sold stock.

The statement did not disclose the transaction’s value, but Co-Chief Executive Rishi Kapoor said on the call the valuation was “consistent” with when an undisclosed Gulf institution paid $138 million for a 9.9 percent stake in September.

Talks were also happening with other potential institutional investors and further stake sales could take place as soon as next year, Ardhi said.

He also placed doubt on its future on the Bahrain stock exchange, when asked if the company could go private, saying as Investcorp grows, “the question of listing” will be approached at the right time.

Mubadala will get a seat on Investcorp’s board, while the pair could pursue joint investment opportunities going forward, Ardhi said.

When asked about future deals, Kapoor said Investcorp was working on a few opportunities in the U.S. and Europe, including a business services company, one in retail distribution, a consumer goods firm and a company that dealt with staple goods.

An investment in Saudi was also being studied, Kapoor added. Sources told Reuters in June that Investcorp was one of three bidders for a minority stake in Al Borg Medical Laboratories. (Editing by Andrew Torchia and Alexandra Hudson)

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