MUSCAT: Oman’s Al Omaniya Financial Services approached United Finance Company with an acquisition or strategic merger proposal between the two entities, both financial institutions said in separate disclosure statements on the website of MSM.
“This has been communicated to the board of directors and further disclosure concerning this matter will be made as and when there are developments to report,” stated Mansoor Mubarak Al Amri, chief executive officer of the United Finance Company.
“This proposal is subject to both parties agreeing to the terms of the arrangement and obtaining necessary approvals from respective shareholders and regulators,” added Aftab Patel, chief executive officer of Al Omaniya Financial Services, in a statement posted on the website of MSM.
United Finance recently received a similar merger offer from Bank Nizwa and the former is yet to respond to it.
Market sources said that Al Omaniya’s proposal is a ‘counter offer’ and United Finance would negotiate with both financial institutions separately and will proceed with the company that offers a better price.
“Al Omaniya Financial Services is looking at consolidating their leadership position by acquiring this company. This could be one way to achieve inorganic growth. This year is a challenging one for leasing companies,” said a market source, who did not want to be named.
Market sources also said that Al Omaniya will be able to substantially increase its asset base and loan book. Al Omaniya’s total assets stand at OMR241.6 million, while its loan book was around OMR228.3 million by end-2014. United Finance’s total assets and loan book are OMR119.2 million and OMR114.7 million, respectively, by end of 2014.
If everything goes well, the merged entity will achieve a 49 per cent growth in total assets and 50 per cent growth in loan book.
Share prices of both financial institutions did not have any impact on the Muscat Securities Market since the disclosures were made after trading hours.
